DOCU Should I Buy
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DocuSign Inc (DOCU) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown positive financial growth in its latest quarter, the stock is currently in a bearish technical trend, with hedge funds and insiders selling heavily. Additionally, options data reflects a bearish sentiment. Analysts have mixed views, with several lowering price targets. For a long-term investor, it may be better to wait for a more favorable entry point or clearer positive catalysts.
The stock is in a bearish trend with the MACD histogram below zero (-0.443), RSI at 18.579 indicating oversold conditions, and bearish moving averages (SMA_200 > SMA_20 > SMA_5). The stock is trading near its support level at S1: 42.875, with resistance at R1: 52.12.
The company reported strong financial growth in Q3 2026, with revenue up 8.42% YoY, net income up 34.13% YoY, and EPS up 33.33% YoY. Analysts note potential AI-driven tailwinds in 2026.
Hedge funds and insiders are selling heavily, with hedge fund selling up 31,585.79% and insider selling up 4,300.86%. Options data reflects bearish sentiment with a high put-call volume ratio (2.27). Analysts have lowered price targets, citing conservative guidance and uncertainty around future metrics.
In Q3 2026, revenue increased to $818.35M (up 8.42% YoY), net income rose to $83.73M (up 34.13% YoY), and EPS improved to 0.4 (up 33.33% YoY). However, gross margin slightly declined to 79.16% (-0.13% YoY).
Analysts have mixed ratings. RBC Capital lowered the price target to $70, citing conservative guidance but potential AI tailwinds. BTIG initiated coverage with a Buy rating and an $88 price target, citing underperformance as a buying opportunity. However, many firms, including Baird, Wedbush, and UBS, have lowered price targets, maintaining Neutral ratings due to cautious outlooks and uncertainty.
