★
DOCU
DocuSign, Inc. · Software - Application
FCF$1.1bC+
Rev+7.8%B
D/E0.10A
P/E33.5xC+
PEG0.59A-
92Score
$49.531Y Target$59.88Near-term target
5Y Target$66.28Compound horizon
10Y Target$84.60Long-dated conviction
FCF$1.1bTTM · 01/26C+
FCF $1.1b — respectable but not differentiating · TTM computed from 4 most-recent quarters (TTM · 01/26).
Rev+7.8%TTM YoYB
Revenue +7.8% — at or above S&P median
D/E0.10A
D/E 0.10 — essentially debt-free, pristine balance sheet
P/E33.5xC+
P/E 33.5 — elevated; requires sustained growth to justify
PEG0.59A-
PEG 0.59 — strong; Lynch's preferred zone
Why now
Software - Application · market cap $9.6b. Down 48% from 52-week high of $94.67 — deep drawdown territory. PEG 0.59 — paying under fair value for the growth rate. 18 sell-side analysts rate this a Hold with a mean 1-yr target of $59.88 (implying +21% upside).
Moat
ROE 16% sits above Buffett's preferred 15% threshold — the equity base is compounding at a rate the market struggles to discount accurately. FCF converts 342% of net income — earnings translate cleanly into cash, a sign that working capital and capex are well-disciplined. Software economics — recurring revenue, embedded customer workflows, and high gross margin all compound the moat once a base account is won. Switching costs are the lever.
Risk
Down 48% from the 52-week high — the market is pricing in something the screen can't see; verify the bear case before sizing up. Trailing P/E 33x sits well above the S&P median (~20x) — multiple compression is a real risk if revenue growth decelerates. AI-native re-pricing — GPT-class models are compressing the cost of features that took years to build; the moat thesis depends on owning the workflow, not just the feature set.
Horizon
1-3 yr $59.88 (18-analyst consensus) — multiple re-rating thesis requires a catalyst. 5 yr $66.28 at ~6% CAGR — dividend + buyback compounding. 10 yr $84.60 if the moat survives secular pressure.
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Position sizing · DOCU
Shares to buy
40
Position size
$1,981
4.0% of portfolio
Stop price
$37.15
25% below $49.53
$ at risk
$500.00
1% of portfolio
Math only — share count is floor(portfolio × risk% ÷ (price × stop%)). Doesn't account for commissions, slippage, gap risk, or position-correlation across your book. Inputs persist locally; never sent to the server. Not investment advice.