DOCU
DocuSign, Inc.
$84.89
High-Growth Software
80%
Revenue × Terminal Margin DCF
Mild
·
Conviction
Overvalued
Trading 6.0% above fair value
You pay
$84.89
Bear
$58.63
Fair
$80.12
Bull
$103.91
Bear
$58.63
-30.9%
8% rev growth, 21% terminal margin
Fair
$80.12
-5.6%
11% rev growth, 28% terminal margin
Bull
$103.91
+22.4%
14% rev growth, 32% terminal margin
Adjust Assumptions
11.0%
28.0%
12.0%
Key Value Driver
Revenue growth (11%) × margin expansion to 28%
Terminal Value % of EV
48%
Implied Market Multiple
4.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$68.75
Divergence from AlphaVal
17%
Summary
Projecting 11% revenue growth with FCF margins expanding from 33% to 28% over 10 years, discounted at 12%, the base-case value is $80.12 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