Is Docusign Stock's YTD Decline Creating a Buying Opportunity?

Docusign, Inc. DOCU has been under considerable selling pressure, with the stock declining 24% year to date.

This drop is in stark contrast to the 18% rally of its industry and the 14% gain of the Zacks S&P 500 composite, highlighting relative underperformance.

Given the weakness in DOCU shares, investors might view this as an attractive buying opportunity. But is now the right time to step in? Let’s take a closer look.

DOCU Enhances IAM With Microsoft, Salesforce

Docusign continues to enhance its Intelligent Agreement Management (IAM) platform, strengthening its integration capabilities with enterprise powerhouses like Microsoft MSFT and Salesforce CRM. These collaborations are not just cosmetic; they are core to the company's mission of optimizing agreement workflows and delivering AI-driven insights that improve the end-user experience.

By embedding more deeply into tools already familiar to business clients—such as Microsoft 365 and Salesforce’s CRM suite—Docusign enables seamless agreement management within platforms that enterprises use daily. This integration simplifies contract processes, accelerates decision-making, and creates a unified ecosystem where legal, sales, and procurement teams can collaborate efficiently.

The IAM platform’s growing synergy highlights Docusign’s commitment to positioning itself as more than an e-signature solution. It is becoming a comprehensive digital agreement hub. Whether a user is drafting a contract within Microsoft Word or managing client pipelines in Salesforce, Docusign’s IAM helps ensure that documents move swiftly through automated, intelligent workflows. These platform partnerships also deepen customer reliance on DOCU’s services, anchoring it within critical enterprise infrastructure. As more businesses seek to modernize agreement processes, Docusign’s integrations with Microsoft and Salesforce are proving instrumental in extending reach, improving retention and reinforcing its competitive edge in the SaaS landscape.

DOCU Grows Revenues, Cash Amid Market Lead

DOCU solidified its leadership in the e-signature market with a strong second-quarter fiscal 2026 performance. It recorded $800 million in total revenues, a 9% year-over-year increase. Impressively, $784.4 million of that came from subscriptions, highlighting the stability of its SaaS model. Subscription growth, driven in part by Microsoft and Salesforce-aligned services, reflects how enterprises are deepening their usage of Docusign across contract lifecycles.

What stands out is Docusign’s profitability and capital discipline. The company generated $218 million in free cash flow in the second quarter, translating to a healthy 27% margin. With Microsoft and Salesforce reinforcing their relevance across enterprises, and strong free cash flows backing that momentum, Docusign remains well-positioned to maintain its dominance while evolving into a broader digital agreement ecosystem.

Estimates for DOCU Signal Decent Growth Ahead

DOCU’s growth outlook indicates steady and sustainable progress, underscoring its ability to deliver consistent performance even in a competitive market. The Zacks Consensus Estimate for fiscal 2026 earnings per share stands at $3.69, 4% above the prior year’s actual figure, with earnings projected to grow a further 10% in fiscal 2027. Revenue expectations also remain healthy, with sales anticipated to rise 7% in fiscal 2026 and 6.6% in fiscal 2027. This steady upward trajectory suggests DocuSign’s solid positioning as a resilient and profitable digital agreement platform, capable of generating dependable long-term shareholder value.

Buy Recommendation: DOCU Poised for a Rebound

Despite its year-to-date decline, DOCU presents a buying opportunity for investors who have a long-term view. The company continues to strengthen its position through strategic integrations with Microsoft and Salesforce, expanding its Intelligent Agreement Management platform into a vital enterprise tool. Its strong subscription base, consistent cash generation and disciplined execution highlight operational resilience. As businesses increasingly adopt digital agreement solutions, Docusign’s expanding ecosystem and focus on intelligent automation position it for renewed growth momentum. The current dip offers an attractive entry point before the company’s next phase of transformation gains wider market recognition.

DOCU currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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