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Investing.com - Evercore ISI has raised its price target on Docusign Inc. (NASDAQ:DOCU) to $92.00 from $90.00 while maintaining an "In Line" rating following the company’s strong quarterly performance. According to InvestingPro analysis, DocuSign appears undervalued at its current price of $76.24, with the stock trading at a P/E ratio of 13.95.
Docusign reported revenue of $801 million, representing 9% growth and exceeding analyst expectations of $780.1 million. Earnings per share came in at $0.92, surpassing the consensus estimate of $0.85, while billings reached $818 million, growing 13% and significantly outperforming the expected $762.5 million. The company maintains impressive gross profit margins of 79.47%, demonstrating strong operational efficiency.
The company demonstrated improved execution in its go-to-market strategy, with continued momentum in its Identity and Access Management (IAM) offerings and notable improvement in Contract Lifecycle Management (CLM). Net retention improved 100 basis points sequentially to 102%, driven primarily by stronger gross retention within the eSignature portfolio.
International revenue grew 13% year-over-year and now accounts for 29% of total revenue, with the Asia-Pacific region emerging as the fastest-growing market. The company also secured significant partnerships, including its largest deal of the quarter through the Microsoft Azure Marketplace and a new relationship with the General Services Administration.
Based on these results, Docusign raised its full-year revenue guidance to a range of $3.19 billion to $3.20 billion, representing approximately 7% growth compared to the previous consensus estimate of $3.16 billion at 6% growth. Operating margins declined 240 basis points year-over-year to 29.8%, with management citing higher cash compensation and cloud migration initiatives as temporary headwinds. InvestingPro data reveals the company maintains a "GREAT" financial health score of 3.3, with 11 additional exclusive ProTips available for subscribers.
In other recent news, DocuSign Inc . reported a robust performance for the second quarter of 2026, exceeding both earnings and revenue forecasts. The company achieved an earnings per share (EPS) of $0.92, surpassing the anticipated $0.85, which represents an 8.24% surprise. Additionally, DocuSign’s revenue reached $800.6 million, surpassing the expected $779.78 million by 2.67%. Despite these positive financial results, the company’s stock experienced a slight decline of 0.53% in aftermarket trading. These developments highlight DocuSign’s ability to exceed market expectations in its latest financial report.
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