Why one analyst believes DocuSign shares could surge by more than 170% in 2026

DocuSign: Analyst Optimism Amid Market Challenges

Even as DocuSign (DOCU) faces a tough market and declining share prices, some analysts remain optimistic. Citizens analyst Patrick Walravens stands out with a notably high price target of $124, suggesting the stock could rise by 171.2% from its current value.

Citizens continues to rate DOCU as “Market Outperform,” highlighting DocuSign’s leadership in electronic signatures and its substantial market potential as key factors for long-term growth.

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This optimistic outlook points to a possible significant rebound for DocuSign, which has been under pressure due to slower e-signature billings. Some strategists believe the company could see notable gains by 2026.

Overview of DocuSign

Based in San Francisco, DocuSign specializes in cloud-based solutions for electronic signatures and digital agreement management, serving clients globally. Its platform allows users to securely create, sign, and manage agreements across devices. The company has expanded its offerings to include automated agreement processes and intelligent contract management. DocuSign’s market capitalization is approximately $9.2 billion.

Stock Performance Trends

DocuSign’s shares have struggled over the past year and into 2026, reflecting both internal challenges and broader declines in software stocks. Over the last 52 weeks, DOCU has dropped by 52% from its peak of about $94.67 in June 2025, and is down 44.25% year-over-year.

So far in 2026, the stock has continued its downward trend, falling roughly 33.76% year-to-date and underperforming major indices. It reached a 52-week low of $40.16 on February 25.

The ongoing decline is attributed to waning investor confidence, sector-wide pressure as investors shift away from growth stocks, and negative analyst sentiment. Concerns about DocuSign’s ability to accelerate growth, especially as it transitions to its Intelligent Agreement Management (IAM) platform, along with cautious guidance for billings and revenue, have further dampened outlooks.

Valuation

DocuSign currently trades at 2.94 times sales, which is below the sector average.

Financial Results: A Mixed Picture

For the third quarter of fiscal 2026, ending October 31 and reported on December 4, 2025, DocuSign posted moderate growth. Key metrics improved year-over-year, but investors remain wary about the company’s growth prospects.

• Total revenue reached $818.4 million, up 8% from the previous year.
• Subscription revenue, the main driver of DocuSign’s SaaS business, increased 9% to $801 million.
• Billings rose 10% to $829.5 million.
• Non-GAAP gross margin edged down to 81.8%, while non-GAAP EPS improved to $1.01, surpassing last year’s $0.90 and consensus estimates.
• Operating cash flow was $290.3 million, and free cash flow hit $262.9 million, both higher than the year-ago period.
• Professional services revenue fell 14%, and margin pressures in some areas highlighted uneven execution.

For the quarter ending January 31, 2026, DocuSign expects total revenue between $825 million and $829 million (7% YOY growth), subscription revenue of $808 million to $812 million (also 7% YOY), and billings of $992 million to $1.002 billion (about 8% YOY). The company reaffirmed its full-year fiscal 2026 guidance of $3.208 billion to $3.212 billion in revenue and $3.379 billion to $3.389 billion in billings.

While revenue growth remains steady, guidance has not sparked much excitement, as investors look for signs of stronger acceleration beyond mid-single-digit increases.

Analysts project EPS of $1.43 for fiscal 2026, a 22.2% increase year-over-year, and expect it to rise another 12.6% to $1.61 in 2027.

Analyst Outlook for DocuSign

Although Citizens maintains a positive stance on DocuSign, other analysts have become more cautious recently.

Jefferies, for example, downgraded DOCU from “Buy” to “Hold,” with Brent Thill lowering the price target from $105 to $45—a 57.1% cut.

On February 18, BTIG analyst Allan Verkhovski reaffirmed a “Buy” rating but reduced his price target from $88 to $70, a 20.5% decrease.

Overall, DocuSign holds a consensus rating of “Moderate Buy.” Among 20 analysts, five recommend a “Strong Buy,” while the remaining 15 suggest “Hold.”

The average price target of $79.19 indicates a potential upside of 73.2% from current levels.