DocuSign stock price has crashed into a technical bear market after crashing by ~35% from its lowest point in 2025. It has slumped even as the S&P 500 and Nasdaq 100 indices jumped to their all-time highs. So, will the stock continue falling, or will it rebound as analysts remain cautious?
DocuSign stock has crashed as investors remain cautious
Wall Street analysts are getting cautious about DocuSign, a company that thrived during the pandemic. Data compiled by MarketBeat shows that the consensus target for the stock has been falling in the past 12 months.
12 months ago, the consensus DocuSign stock price target was $92, a figure that has constantly dropped to $85. This target is about 25% above the current level.
A closer look at analyst trends shows that trends among analysts have worsened in the past few months. For example, an RBC analyst dropped his target from $95 to $70, while Evercore ISI cut the target from $92 to $80.
UBS, Wedbush, Wells Fargo, Piper Sandler, JPMorgan, Bank of America, Zacks, and Jefferies have all slashed their targets in their recent statements. These analysts believe that the company has little upside going forward as its demand softens.
DOCU’s business remains under pressure
DocuSign’s business has come under pressure in the past few years as it faces substantial competition pressure. For example, top companies like Box, Dropbox, Google, Adobe, Zoho, Microsoft, and PandaDoc have launched similar products.
Additionally, the company’s growth trajectory has continued slowing in the coming years. Data compiled by Yahoo Finance shows that the average estimate is that its annual revenue growth this year will be 7.86% to $3.2 billion. This growth will be lower than the double-digit growth it experienced a few years before that. For example, its revenue grew by 45% in 2021, 19% in 2022, 9.78% in 2023, and 7.78% in 2024.
Wall Street analysts believe that the company’s revenue growth this year will be 6.90%. This slowdown will continue in the coming years, turning the company from being a growth stock to a value stock.
The most recent results showed that the company’s business rose by 8% to $818 million, while its billings rose by 10% to $829 million. Also, its operating margin moved to 31.4%.
One major positive catalyst for the DOCU stock price is that the company has become undervalued. Data compiled by Seeking Alpha shows that its forward price-to-earnings ratio of 17, lower than the sector median of 25, and its five-year average of 56.
However, the rule-of-40 metric shows that the company’s growth and margins don’t add up. Data shows that its forward guidance stands at 7%, while its forward operating margin is about 29%. Its net income margin is 9.5%. Therefore, the rule-of-40 metric is much lower than the important metric of 40.
DOCU stock price technical analysis
The daily timeframe chart shows that the DOCU stock price has crashed from a high of $107 in December 2024 to the current $69.
A closer look shows that the stock has remained below the 50-day and 100-day Exponential Moving Averages (EMA).
The Supertrend indicator has remained in the red and inside the descending channel. A closer look shows that the stock is in the process of forming a falling wedge pattern, which is made up of two descending and converging trendlines.
The two lines of the wedge pattern have a long way to go before their convergence, meaning that the stock has more downside in the near term. This retreat will happen as the two lines approach their convergence. It will then rebound when the convergence nears.
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