Docusign Q2 FY1/25 Earnings Review

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Sometimes Fundamentals Matter

by Alex King, CEO, Cestrian Capital Research, Inc.

For the most part the enormous amount of effort that investors and analysts and the commentariat at large put into trying to understand companies’ product strategy, competitive positioning, financial fundamentals etc, is a waste of time. Easier in my view just to learn to chart and then invest in or trade SPY or QQQ. Lower risk and, if you do it right, more upside too. (At least if you are prepared to get a little fruity with structuring, hedging and so forth).

Sometimes though, fundamentals do matter. Docusign ($DOCU) is a software companies whose products …. ah that doesn’t matter. It has modest but good-enough revenue growth, rising EBITDA and cashflow margins, a perfectly strong enough balance sheet, and an order book which is large vs. its trailing twelve month revenue number. And the market is asking you to pay 4x trailing revenue, 13x trailing EBITDA, or 18x trailing unlevered pretax free cashflow, to buy the stock. In my book - and in most other grownup software investors’ books - that’s not expensive.

Here’s $DOCU headlines.

So, read on for the financial detail, valuation, our stock chart and rating! Any paid subscription here gets you the full note.