DocuSign Stock Is Trading Higher Tuesday: What's Going On?

DocuSign Inc DOCU shares are trading higher Tuesday after it was announced the company will join the S&P MidCap 400.

What To Know: DocuSign will replace MDU Resources Group Inc. in the S&P MidCap 400, effective prior to the opening of trading on Friday. MDU Resources Group will replace Chuy’s Holdings in the S&P SmallCap 600.

The shakeup from S&P Dow Jones Indices comes as Darden Restaurants gears up to complete its acquisition of Chuy’s Holdings.

DocuSign shares are now up more than 15% over the past month. At the beginning of September, DocuSign reported second-quarter financial results, beating analyst estimates on the top and bottom lines as total revenue climbed 7% year-over-year.

The agreement cloud company guided for third-quarter revenue in the range of $743 million to $747 million and raised its fiscal year 2025 revenue outlook to between $2.94 billion and $2.952 billion. DocuSign is not due to report earnings again until December, per Benzinga Pro.

See Also: PepsiCo Adjusts 2024 Revenue Expectations After Mixed Q3 Performance And Global Challenges

Is DOCU A Good Stock To Buy?

When deciding whether to buy a stock, there are some key fundamentals investors may want to consider. One of these factors is revenue growth. Buying a stock is essentially a bet that the business will continue to grow and generate profits in the future. DocuSign has reported average annual revenue growth of 26.43% over the past five years.

It's also important to pay attention to valuation when deciding whether to buy a stock. DocuSign has a forward P/E ratio of 16.92. This means investors are paying $16.92 for each dollar of expected earnings in the future. The average forward P/E ratio of DocuSign's peers is 49.16.

Other important metrics to look at include a company's profitability, balance sheet, performance relative to a benchmark index and valuation compared to peers. For in-depth analysis tools and important financial data, check out Benzinga PRO.

DOCU Price Action: DocuSign shares were up 7.04% at $67.20 at the time of publication Tuesday, according to Benzinga Pro.

Photo: courtesy of DocuSign.