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BRAZIL – March 24, 2021: A DocuSign logo is seen on a smartphone in this photo illustration. [+] (Image courtesy of Rafael Henrique/SOPA Images/LightRocket/Getty Images)
Getty Images/SOPA Images/LightRocket
Following a strong Q1 FY’22 earnings release, DocuSign stock (NASDAQ: DOCU) increased around 2% last week, and has risen about 20% in the last month (FY ends Jan 31). DocuSign’s sales increased by 58 percent year over year to $469 million, with margins increasing as well. The company also offered a better-than-expected full-year outlook, signaling that its e-signatures capabilities are here to stay even after the epidemic, as organizations transition away from paper documents and toward more seamless digital solutions that help sign and manage papers. So, will DocuSign stock continue to rise in the weeks and months ahead, or will a correction be more likely? The Trefis Machine Learning Engine, which identifies trends in a company’s historical stock price data, predicts that DocuSign stock will return 5.6 percent in the next month (21 trading days), after a 2% increase in the previous five trading days. The stock is also anticipated to outperform the S&P 500 during the following month, with a return of 4.3 percent higher than the S&P 500.
But how do these figures vary if you want to hold DocuSign stock for a shorter or longer period of time? On the Trefis Machine Learning, you may test the response and many more combinations to see if DOCU stock would rise following a dip or vice versa. You can evaluate the likelihood of recovery across time intervals of a quarter, month, or even a single day!
TRY THE MACHINE LEARNING ENGINE FOR YOURSELF:
IF DOCU stock moves -5 percent over 5 trading days, DOCU stock moves an average of 5.3 percent over the next 21 trading days, with a 69.1 percent likelihood of a positive return during this period.
Furthermore, given a -5 percent move in the stock over 5 trading days, it has historically seen an excess return of 3.7 percent over the next 21 trading days when compared to the S&P500, with a 62.5 percent probability of a positive excess return.
ADDITIONAL INFORMATION FOR YOU
Making Sense of DOCU Stock Movements: Some Fun Scenarios, FAQs, and Making Sense of DOCU Stock Movements:
Question 1: Is DocuSign stock’s average return higher following a drop?
Consider the following two scenarios.
Case 1: DocuSign’s stock falls 5% or more in a week.
Case 2: DocuSign’s stock gains 5% or more in a week.
Is the average DocuSign stock return higher in the next month after Case 1 or Case 2?
DOCU stock performs better after Case 1 (where the stock has just suffered a 5% loss over the previous week), with an average return of 5.3 percent over the next month (21 trading days) vs 5.2 percent for Case 2 (where the stock has just suffered a 5% loss over the previous week).
In instance, the S&P 500 has an average return of 3.1 percent over the next 21 trading days in Case 1 and only 0.5 percent in Case 2, according to our dashboard, which shows the average return for the S&P 500 after a decline or increase.
Use the Trefis machine learning engine to understand how DocuSign stock will react to a given gain or loss over time.
Question 2: Does it pay to be patient?
Answer: If you buy and retain DocuSign stock, you may expect near-term swings to fade away over time, and a long-term favorable trend to favor you – at least if the firm is otherwise healthy.
Overall, facts and Trefis’ machine learning engine estimates show that patience pays off in most stocks!
The following table shows the returns for DOCU stock over the next N days after a -5 percent change over the previous five trading days, as well as the returns for the S&P500:

Trefis Average Return
Question 3: If you wait a bit following a climb, what is the average return?
Answer: As mentioned in the preceding question, the average return after a rise is lower than after a decrease. Surprisingly, if a company has increased in the recent few days, you should avoid short-term bets for most equities – although DOCU stock looks to be an exception to this general rule.
The table below shows DOCU’s returns over the next N days after a 5% change over the previous five trading days, as well as the S&P500’s returns:

Trefis Average Return
Are you looking for software stocks that are undervalued yet have a lot of room to grow? Check out our Mid-Cap SaaS Stocks topic.
Here you may find all of Trefis’ Featured Analyses and Trefis Data./nRead More

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