William Blair On DocuSign's Stock: 'Sign Us Up'

Docusign Inc DOCU, fresh off its April initial public offering, is now seen as the 800-pound gorilla in the e-signature market, according to William Blair.

The Analyst

William Blair's Justin Furby initiated coverage of Docusign with an Outperform rating

The Thesis

Docusign provides individuals and businesses the ability to digitize an agreement process. It should be seen as a "brand that is quickly becoming a verb," Furby said in a note. Docusign already boasts more than 370,000 users, including more than 300 of the Fortune 500 companies and helps facilitate hundreds of millions of front-and-back-office transactions per year.

Despite what appears to be an already large client base, Docusign's penetration in the e-signature market is just 2 percent of the $25 billion global market opportunity, the analyst wrote. As such, the company has the opportunity to drive a subscription revenue growth of 25 percent or more as new growth opportunities are still in the pipeline, including vaulting, payments, and smart contracts.

Docusign's business is already integrated in third-party applications and formed as part of strategic partnerships with some of the biggest vendors, Furby wrote. Nearly 60 percent of all transactions on the platform were driven by the company's DocuSign's API, which emphasizes its value to developers and ease-of-use in being included into workflows.

Bottom line, "sign us up" for Docusign's stock, said Furby.

Price Action

Shares of Docusign were trading around $43.25 Tuesday afternoon.

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