If you've bought a house, leased an apartment, or signed a legal agreement recently, it's likely you didn't use a pen and paper. With the world adopting social distancing practices, signing documents in person is quickly becoming a thing of the past, and DocuSign's (NASDAQ:DOCU) leading e-signature product is picking up the slack. On the back of solid growth prospects, its stock has tripled this year, leaving some investors wondering if they've missed out, but that's not the case at all. Let's look at five reasons why.

1. It has a massive market for its core business 

DocuSign's flagship product is its e-signature service. Its 749,000 customers use the e-signature as a stand-alone service, and it can also be integrated into existing business workflows.

Over the past year, the company has attracted 212,000 subscription-paying customers, representing a 39% year-over-year gain from the second quarter last year. But this is just the beginning. Management estimates its current customer base is less than 2% of what it could be in its target markets globally.

2. It has a sticky product that's winning and growing customers

DocuSign supports integrations with more than 350 software tools that allow e-signatures to be easily embedded into existing enterprise business processes. This strategy has been incredibly successful, and these integrations drive 60% of all e-signature transactions.

CEO Daniel Springer calls these use cases "pretty sticky," meaning they tend to stay in place for longer and often encourage the customer to implement e-signatures in other processes. This stickiness can be measured by its solid dollar-based retention rate of 120%, meaning on average its existing customers spend 20% more every year.

Keyboard with blue shift key that is labeled with the word sign.

Image source: Getty Images.

3. It has a big opportunity with big customers 

Enterprise and commercial customers have grown 55% year over year to reach the 99,000 mark. These big customers make up 88% of revenues and are a tremendous source of future revenue growth.

Once a large organization starts to implement e-signatures across its business, it often becomes clear that there's more opportunity. Whether it's preparing, signing, acting on, or managing agreements, all of these processes can be improved with digitization provided by DocuSign's Agreement Cloud product suite. The revenues for these products aren't material yet, but the market opportunity could be as big as e-signature, potentially doubling its total addressable market.

4. It's making smart acquisitions

The company's made two key acquisitions this year. In February, it announced it was buying Seal Software, an artificial intelligence and contracts analytics company, for $188 million. In July, it shared its plans to acquire Liveoak Technologies for $38 million to enhance its remote e-notary service.

These two platforms will be integrated into the Agreement Cloud suite of products to enhance the breadth of its offerings. These smart moves show management's willingness to improve its products for customers, even if it means going outside the company to do it. 

5. Its industry solutions could unlock further growth

DocuSign has been working to tailor its offerings to ensure it can meet rigorous standards for different industries. Its Rooms for Real Estate and Rooms for Mortgage products provide a complete end-to-end software product to manage the home buying process. For life science companies, it has a specific product that's compliant to meet rigorous U.S. Food and Drug Administration electronic documentation standards.

It's disrupting the legal profession with artificial intelligence and document analysis tools to simplify the legal review process. Additionally, it's building a dedicated data center to meet federal government top-secret electronic data storage and retrieval specification. These industry solutions will go a long way toward capturing the other 98% of the businesses that haven't adopted its tools yet.

The bottom line for investors

DocuSign's e-signature software is an incredible productivity tool for businesses large and small. But that's just the beginning of where this software-as-a-service specialist will be in the next five years. Its shares may seem pricey at a 36 price-to-sales ratio, but investors willing to pay up for this tech stock and hold for the long term will be happy they did. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.