Why BofA Is Bullish On DocuSign Stock

DocuSign Inc DOCU is an industry-leading brand in the contract lifecycle management and eSignature market, and the market is an underappreciated one, according to BofA Securities.

The DocuSign Analyst: Brad Sills reinstated coverage of DocuSign with a Buy rating and $250 price target. 

The DocuSign Takeaways: “DocuSign screens well in our 4M framework for software investing,” Sills said in a Thursday note.

Contracting workflow and eSignatures represent a combined opportunity of $24 billion, the analyst said. 

DocuSign's competitive moat stems from a large installed base of over 822,000 customers, a distribution channel of 3,000-plus sales and marketing personnel and its eSignature and agreement software, he said. 

Sills said he expects DocuSign to “continue benefitting from a strong adoption cycle, stemming from demand for a cloud based solution which reduces contract execution cycles time from weeks to less than a day."

Given the large market DocuSign addresses and its competitive positioning, “we believe a long runway exists for 25%+ revenue growth,” the analyst said. 

DOCU Price Action: Shares of DocuSign were trading 3.27% higher to $212.44 at the time of publication Thursday.