Intrinsic value of DocuSign, Inc. - DOCU

Previous Close

$44.81

  Intrinsic Value

$92.70

stock screener

  Rating & Target

str. buy

+107%

Previous close

$44.81

 
Intrinsic value

$92.70

 
Up/down potential

+107%

 
Rating

str. buy

We calculate the intrinsic value of DOCU stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 7.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  42.10
  38.39
  35.05
  32.05
  29.34
  26.91
  24.72
  22.74
  20.97
  19.37
  17.94
  16.64
  15.48
  14.43
  13.49
  12.64
  11.87
  11.19
  10.57
  10.01
  9.51
  9.06
  8.65
  8.29
  7.96
  7.66
  7.40
  7.16
  6.94
  6.75
Revenue, $m
  737
  1,021
  1,378
  1,820
  2,354
  2,988
  3,726
  4,573
  5,532
  6,604
  7,789
  9,085
  10,491
  12,005
  13,624
  15,346
  17,169
  19,089
  21,107
  23,220
  25,428
  27,732
  30,132
  32,629
  35,226
  37,926
  40,731
  43,646
  46,676
  49,825
Variable operating expenses, $m
  388
  535
  720
  949
  1,225
  1,553
  1,936
  2,375
  2,871
  3,426
  4,034
  4,705
  5,433
  6,217
  7,056
  7,947
  8,891
  9,886
  10,930
  12,025
  13,168
  14,361
  15,604
  16,897
  18,242
  19,640
  21,093
  22,603
  24,172
  25,803
Fixed operating expenses, $m
  308
  314
  321
  328
  336
  343
  351
  358
  366
  374
  382
  391
  399
  408
  417
  426
  436
  445
  455
  465
  475
  486
  497
  507
  519
  530
  542
  554
  566
  578
Total operating expenses, $m
  696
  849
  1,041
  1,277
  1,561
  1,896
  2,287
  2,733
  3,237
  3,800
  4,416
  5,096
  5,832
  6,625
  7,473
  8,373
  9,327
  10,331
  11,385
  12,490
  13,643
  14,847
  16,101
  17,404
  18,761
  20,170
  21,635
  23,157
  24,738
  26,381
Operating income, $m
  42
  171
  337
  543
  793
  1,091
  1,440
  1,840
  2,295
  2,804
  3,373
  3,989
  4,659
  5,380
  6,152
  6,973
  7,842
  8,758
  9,721
  10,730
  11,785
  12,885
  14,031
  15,224
  16,465
  17,755
  19,096
  20,490
  21,939
  23,445
EBITDA, $m
  74
  213
  391
  613
  882
  1,202
  1,576
  2,007
  2,495
  3,041
  3,645
  4,307
  5,026
  5,800
  6,628
  7,510
  8,443
  9,426
  10,460
  11,543
  12,675
  13,855
  15,086
  16,366
  17,698
  19,083
  20,522
  22,018
  23,572
  25,188
Interest expense (income), $m
  0
  0
  -9
  7
  28
  54
  85
  122
  165
  214
  269
  332
  400
  476
  557
  645
  739
  839
  945
  1,057
  1,174
  1,296
  1,425
  1,558
  1,698
  1,843
  1,994
  2,150
  2,313
  2,483
  2,658
Earnings before tax, $m
  42
  180
  329
  515
  739
  1,006
  1,318
  1,676
  2,081
  2,534
  3,041
  3,589
  4,183
  4,823
  5,506
  6,233
  7,003
  7,813
  8,665
  9,556
  10,488
  11,460
  12,473
  13,526
  14,622
  15,762
  16,946
  18,177
  19,456
  20,786
Tax expense, $m
  11
  49
  89
  139
  200
  272
  356
  452
  562
  684
  821
  969
  1,129
  1,302
  1,487
  1,683
  1,891
  2,110
  2,339
  2,580
  2,832
  3,094
  3,368
  3,652
  3,948
  4,256
  4,575
  4,908
  5,253
  5,612
Net income, $m
  30
  132
  241
  376
  540
  735
  962
  1,223
  1,519
  1,850
  2,220
  2,620
  3,054
  3,520
  4,020
  4,550
  5,112
  5,704
  6,325
  6,976
  7,656
  8,366
  9,105
  9,874
  10,674
  11,506
  12,371
  13,269
  14,203
  15,174

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  881
  1,219
  1,647
  2,175
  2,813
  3,569
  4,452
  5,464
  6,610
  7,890
  9,306
  10,854
  12,534
  14,343
  16,278
  18,335
  20,512
  22,807
  25,217
  27,742
  30,380
  33,132
  36,000
  38,983
  42,086
  45,311
  48,663
  52,146
  55,766
  59,529
Adjusted assets (=assets-cash), $m
  881
  1,219
  1,647
  2,175
  2,813
  3,569
  4,452
  5,464
  6,610
  7,890
  9,306
  10,854
  12,534
  14,343
  16,278
  18,335
  20,512
  22,807
  25,217
  27,742
  30,380
  33,132
  36,000
  38,983
  42,086
  45,311
  48,663
  52,146
  55,766
  59,529
Revenue / Adjusted assets
  0.837
  0.838
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
Average production assets, $m
  129
  179
  241
  319
  412
  523
  652
  800
  968
  1,156
  1,363
  1,590
  1,836
  2,101
  2,384
  2,686
  3,005
  3,341
  3,694
  4,063
  4,450
  4,853
  5,273
  5,710
  6,165
  6,637
  7,128
  7,638
  8,168
  8,719
Working capital, $m
  -302
  -417
  -564
  -744
  -963
  -1,222
  -1,524
  -1,871
  -2,263
  -2,701
  -3,186
  -3,716
  -4,291
  -4,910
  -5,572
  -6,277
  -7,022
  -7,808
  -8,633
  -9,497
  -10,400
  -11,342
  -12,324
  -13,345
  -14,407
  -15,512
  -16,659
  -17,851
  -19,090
  -20,379
Total debt, $m
  -166
  139
  523
  998
  1,573
  2,254
  3,048
  3,959
  4,990
  6,143
  7,416
  8,810
  10,322
  11,950
  13,691
  15,543
  17,502
  19,568
  21,737
  24,009
  26,384
  28,861
  31,441
  34,126
  36,919
  39,822
  42,838
  45,973
  49,231
  52,617
Total liabilities, $m
  793
  1,097
  1,482
  1,957
  2,531
  3,212
  4,006
  4,918
  5,949
  7,101
  8,375
  9,769
  11,281
  12,909
  14,650
  16,501
  18,461
  20,526
  22,695
  24,968
  27,342
  29,819
  32,400
  35,085
  37,877
  40,780
  43,797
  46,931
  50,189
  53,576
Total equity, $m
  88
  122
  165
  217
  281
  357
  445
  546
  661
  789
  931
  1,085
  1,253
  1,434
  1,628
  1,833
  2,051
  2,281
  2,522
  2,774
  3,038
  3,313
  3,600
  3,898
  4,209
  4,531
  4,866
  5,215
  5,577
  5,953
Total liabilities and equity, $m
  881
  1,219
  1,647
  2,174
  2,812
  3,569
  4,451
  5,464
  6,610
  7,890
  9,306
  10,854
  12,534
  14,343
  16,278
  18,334
  20,512
  22,807
  25,217
  27,742
  30,380
  33,132
  36,000
  38,983
  42,086
  45,311
  48,663
  52,146
  55,766
  59,529
Debt-to-equity ratio
  -1.880
  1.140
  3.180
  4.590
  5.590
  6.310
  6.850
  7.250
  7.550
  7.790
  7.970
  8.120
  8.240
  8.330
  8.410
  8.480
  8.530
  8.580
  8.620
  8.650
  8.680
  8.710
  8.730
  8.750
  8.770
  8.790
  8.800
  8.820
  8.830
  8.840
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  30
  132
  241
  376
  540
  735
  962
  1,223
  1,519
  1,850
  2,220
  2,620
  3,054
  3,520
  4,020
  4,550
  5,112
  5,704
  6,325
  6,976
  7,656
  8,366
  9,105
  9,874
  10,674
  11,506
  12,371
  13,269
  14,203
  15,174
Depreciation, amort., depletion, $m
  32
  42
  55
  70
  89
  111
  137
  166
  200
  237
  273
  318
  367
  420
  477
  537
  601
  668
  739
  813
  890
  971
  1,055
  1,142
  1,233
  1,327
  1,426
  1,528
  1,634
  1,744
Funds from operations, $m
  63
  174
  295
  446
  628
  845
  1,099
  1,390
  1,719
  2,087
  2,493
  2,938
  3,421
  3,941
  4,496
  5,087
  5,713
  6,372
  7,064
  7,789
  8,546
  9,336
  10,160
  11,016
  11,907
  12,833
  13,796
  14,797
  15,837
  16,918
Change in working capital, $m
  -89
  -116
  -146
  -181
  -218
  -259
  -302
  -347
  -392
  -438
  -484
  -530
  -575
  -619
  -662
  -704
  -745
  -786
  -825
  -864
  -903
  -942
  -982
  -1,021
  -1,062
  -1,104
  -1,147
  -1,192
  -1,239
  -1,288
Cash from operations, $m
  152
  289
  441
  626
  847
  1,104
  1,401
  1,736
  2,111
  2,526
  2,977
  3,468
  3,996
  4,560
  5,159
  5,792
  6,458
  7,157
  7,889
  8,653
  9,449
  10,279
  11,141
  12,038
  12,969
  13,938
  14,944
  15,989
  17,076
  18,206
Maintenance CAPEX, $m
  -18
  -26
  -36
  -48
  -64
  -82
  -105
  -130
  -160
  -194
  -231
  -273
  -318
  -367
  -420
  -477
  -537
  -601
  -668
  -739
  -813
  -890
  -971
  -1,055
  -1,142
  -1,233
  -1,327
  -1,426
  -1,528
  -1,634
New CAPEX, $m
  -38
  -50
  -63
  -77
  -93
  -111
  -129
  -148
  -168
  -188
  -207
  -227
  -246
  -265
  -283
  -301
  -319
  -336
  -353
  -370
  -386
  -403
  -420
  -437
  -454
  -472
  -491
  -510
  -530
  -551
Cash from investing activities, $m
  -56
  -76
  -99
  -125
  -157
  -193
  -234
  -278
  -328
  -382
  -438
  -500
  -564
  -632
  -703
  -778
  -856
  -937
  -1,021
  -1,109
  -1,199
  -1,293
  -1,391
  -1,492
  -1,596
  -1,705
  -1,818
  -1,936
  -2,058
  -2,185
Free cash flow, $m
  96
  214
  343
  501
  690
  911
  1,167
  1,458
  1,784
  2,145
  2,539
  2,969
  3,432
  3,928
  4,455
  5,014
  5,602
  6,220
  6,868
  7,545
  8,250
  8,986
  9,751
  10,546
  11,373
  12,232
  13,125
  14,053
  15,018
  16,021
Issuance/(repayment) of debt, $m
  -166
  304
  385
  475
  574
  681
  794
  911
  1,031
  1,152
  1,274
  1,394
  1,512
  1,628
  1,741
  1,852
  1,959
  2,065
  2,169
  2,272
  2,375
  2,477
  2,580
  2,685
  2,793
  2,903
  3,017
  3,135
  3,258
  3,386
Issuance/(repurchase) of shares, $m
  396
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  230
  304
  385
  475
  574
  681
  794
  911
  1,031
  1,152
  1,274
  1,394
  1,512
  1,628
  1,741
  1,852
  1,959
  2,065
  2,169
  2,272
  2,375
  2,477
  2,580
  2,685
  2,793
  2,903
  3,017
  3,135
  3,258
  3,386
Total cash flow (excl. dividends), $m
  326
  519
  728
  976
  1,264
  1,592
  1,961
  2,369
  2,815
  3,297
  3,812
  4,362
  4,944
  5,556
  6,196
  6,865
  7,562
  8,286
  9,037
  9,817
  10,625
  11,463
  12,331
  13,231
  14,166
  15,135
  16,142
  17,188
  18,276
  19,408
Retained Cash Flow (-), $m
  -427
  -34
  -43
  -53
  -64
  -76
  -88
  -101
  -115
  -128
  -142
  -155
  -168
  -181
  -193
  -206
  -218
  -229
  -241
  -252
  -264
  -275
  -287
  -298
  -310
  -323
  -335
  -348
  -362
  -376
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -100
  485
  685
  923
  1,200
  1,517
  1,873
  2,268
  2,700
  3,169
  3,671
  4,208
  4,776
  5,375
  6,003
  6,659
  7,344
  8,056
  8,796
  9,564
  10,361
  11,187
  12,044
  12,933
  13,855
  14,812
  15,807
  16,840
  17,914
  19,031
Discount rate, %
  4.40
  4.62
  4.85
  5.09
  5.35
  5.62
  5.90
  6.19
  6.50
  6.83
  7.17
  7.53
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
PV of cash for distribution, $m
  -96
  443
  594
  757
  925
  1,093
  1,254
  1,402
  1,532
  1,637
  1,714
  1,762
  1,777
  1,761
  1,715
  1,641
  1,545
  1,429
  1,299
  1,161
  1,019
  879
  744
  617
  502
  400
  312
  238
  177
  129
Current shareholders' claim on cash, %
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

FINANCIAL RATIOS  of  DocuSign, Inc. (DOCU)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

DOCU stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DOCU stock intrinsic value calculation we used $519 million for the last fiscal year's total revenue generated by DocuSign, Inc.. The default revenue input number comes from 0001 income statement of DocuSign, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DOCU stock valuation model: a) initial revenue growth rate of 42.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.4%, whose default value for DOCU is calculated based on our internal credit rating of DocuSign, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of DocuSign, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DOCU stock the variable cost ratio is equal to 53%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $301 million in the base year in the intrinsic value calculation for DOCU stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for DocuSign, Inc..

Corporate tax rate of 27% is the nominal tax rate for DocuSign, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DOCU stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DOCU are equal to 17.5%.

Life of production assets of 3.7 years is the average useful life of capital assets used in DocuSign, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DOCU is equal to -40.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $-338.648 million for DocuSign, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 165.220 million for DocuSign, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of DocuSign, Inc. at the current share price and the inputted number of shares is $7.4 billion.

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