DocuSign (DOCU), a key player in e-signatures, is set to release its Q3 FY25 results on December 5. Wall Street analysts expect the company to report earnings of $0.87 per share for Q3, up 10% year-over-year. Revenues are also expected to rise by 6.4% year-over-year, reaching $745.3 million for the quarter.
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Building on this, DocuSign shares have risen about 75% this year, driven by strong earnings and improved profitability. Also, DOCU’s focus on new AI tools has helped it tap into growing market opportunities and boost investor confidence.
It’s worth noting that DOCU has had a strong track record when it comes to beating earnings. The company has surpassed estimates in all of the past nine quarters.
Analysts’ Mixed Opinions Ahead of DocuSign’s Q3 Earnings
Ahead of DocuSign’s Q3 results, Jefferies analyst Brent Thill raised the price target to $95 from $80 and maintained a Buy rating on DocuSign. Noting a 40% rise in shares since the Q2 earnings report, Thill views DocuSign as well-positioned to benefit from potential interest rate cuts. Further, Jefferies remains optimistic about DocuSign’s ability to sustain sales and billings growth and achieve margins exceeding 30%.
Similarly, JMP Securities analyst Patrick Walravens increased his price target for DocuSign to $108 from $84, maintaining a Buy rating. The firm cited 10 positive indicators, including strong sales performance from eight sales representatives across the U.S. and EMEA. It’s worth noting that Walravens is a five-star analyst with a 55% success rate and an average return of 8.9% per rating.
Meanwhile, CFRA downgraded the stock’s rating to Sell from Hold, while maintaining a price target of $65.00 per share.
What Do Options Traders Anticipate?
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting a 9.94% move in either direction.
Is DocuSign a Good Stock to Buy?
Turning to Wall Street, analysts have Hold consensus rating on DOCU stock based on three Buys, nine Holds, and two Sell ratings assigned in the past three months, as indicated by the graphic below. The average DOCU price target of $70.09 per share implies 12.88% downside potential.
