DOCU
DocuSign, Inc.
$66.30
High-Growth Software
80%
Revenue × Terminal Margin DCF
Moderate
·
Conviction
Fair Value
Trading 15.5% below fair value
You pay
$66.30
Bear
$57.39
Fair
$78.43
Bull
$101.71
Bear
$57.39
-13.4%
8% rev growth, 21% terminal margin
Fair
$78.43
+18.3%
11% rev growth, 28% terminal margin
Bull
$101.71
+53.4%
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
3.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$68.75
Divergence from AlphaVal
14%
Summary
Projecting 11% revenue growth with FCF margins expanding from 33% to 28% over 10 years, discounted at 12%, the base-case value is $78.43 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