DocuSign stock drops 72%, seen as buying opportunity

The Nasdaq-100 index has been experiencing a decline since February, officially entering correction territory this month as losses exceeded 10% from its peak. Historically, the U.S. stock market tends to recover and reach new highs over time. This recent downturn may provide a good opportunity for long-term investors. One AI stock that is flying under the radar is Docusign. Although it has risen by 51% over the past year, it remains 72% below its all-time high from 2021. Docusign specializes in digital document technologies that help businesses manage contracts more efficiently. Its recent focus on AI has enhanced its offerings. Docusign launched a new platform called Intelligent Agreement Management (IAM), aimed at improving contract management. This platform helps businesses manage agreements more effectively and is already gaining traction. A notable feature includes Navigator, which helps organizations store and easily search through contracts. In fiscal 2025, Docusign reported a record revenue of $2.98 billion, marking an 8% increase from the previous year. The company made a profit of $1.06 billion, a significant surge compared to the past. While some of this growth resulted from lower spending, the company still showed strong results. Docusign's stock is currently valued at a price-to-sales ratio of 6.1, which is significantly lower than its long-term average. This suggests the stock is undervalued, especially when compared to the broader technology sector. As Docusign continues to tap into its $50 billion market, analysts believe there is potential for the stock to recover and grow in value in the long term.