DOCU
DocuSign, Inc.
$49.53
High-Growth Software
80%
Revenue × Terminal Margin DCF
Moderate
·
Conviction
Undervalued
Trading 31.8% below fair value
You pay
$49.53
Bear
$55.32
Fair
$72.61
Bull
$92.96
Bear
$55.32
+11.7%
8% rev growth, 21% terminal margin
Fair
$72.61
+46.6%
10% rev growth, 28% terminal margin
Bull
$92.96
+87.7%
13% rev growth, 32% terminal margin
Key Value Driver
Revenue growth (10%) × margin expansion to 28%
Terminal Value % of EV
47%
Implied Market Multiple
2.8x
Summary
Our base-case estimate uses a discounted cash flow model based on revenue growth and long-run free cash flow margins. We then blend that result with the average analyst price target of $68.67 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $72.61 per share.
Warnings
Gross margin of 79% means each dollar of revenue is highly profitable. As the company grows, overhead costs should shrink as a share of revenue, boosting overall profits.
Key Risks
- Current FCF misleads — the model values future margins, not today's cash
- SBC dilution is the hidden tax: 2-4% annual share growth compounds fast
- Revenue deceleration is inevitable — the question is when and how steep