E-signature pioneer DocuSign, Inc. (DOCU) will become part of the NASDAQ-100 Index (NDX), the NASDAQ-100 Equal Weighted Index (NDXE) and the NASDAQ-100 Technology Sector Index (NDXT) before market open on Monday, June 22, 2020.
DocuSign will replace United Airlines Holdings, Inc. (UAL) in the NASDAQ-100 Index and the NASDAQ-100 Equal Weighted Index. United Airlines will also be removed from the NASDAQ-100 Ex-Tech Sector Index (NDXX) before the market opens next Monday.
Shares in DOCU have more than doubled year-to-date, while UAL has plunged 55% as stringent travel restrictions tied to the coronavirus pandemic have brought travel demand almost to a halt.
Meanwhile DocuSign is blossoming as it expands from its core e-signature functionality into the broader agreement process, including the preparation and management of agreements/ contracts.
Following a very strong F1Q21, RBC Capital’s Alex Zukin reiterated his buy rating on the stock while ramping up his price target from $150 to $170 (13% upside potential).
“While COVID benefited the quarter, we believe demand trends are durable and pipeline strong” he commented. “DocuSign delivered an exceptional quarter with the strongest beat in its history clearly positioning itself in the winner/beneficiary segment of the trend to Remote Work.”
Once a customer starts DocuSigning, says Zukin, they don’t go back to paper and instead become a target for upsell. “We believe both the e-signature and broader “system of agreement” provide one of the most tangible value propositions (removal of paper-based processes) in an organization’s digital-transformation journey” he concludes.
Overall, DOCU boasts a cautiously optimistic Moderate Buy Street consensus with 8 recent buys ratings and 4 holds. Due to the stock’s recent rally, its average analyst price target of $153 indicates only 1% upside potential from current levels. (See DOCU stock analysis on TipRanks).