Getting documents signed with pen and paper is hard enough, but doing it while your colleagues and business partners are all working remotely is an even bigger pain. Given the ongoing coronavirus pandemic, it's not a surprise that DocuSign's (NASDAQ:DOCU) flagship e-signature product is signing on more customers than ever. The stock's performance has reflected the tremendous results the company is putting up, and shareholders have realized an incredible threefold return over the last 12 months. But this software-as-a-service specialist isn't anywhere close to done growing yet.

Let's take a closer look at why this is the one stock I'd buy right now.

It's a growth machine

DocuSign has had a history of amazing growth, more than doubling its top line between fiscal 2017 and fiscal 2020. But the coronavirus has accelerated growth even more.


Q2 FY2020

Q3 FY2020

Q4 FY2020

Q1 FY2021

Q2 FY2021


$236 million

$250 million

$275 million

$297 million

$342 million

YOY revenue growth












Customer YOY growth






Net dollar-based retention






Data source: DocuSign earnings releases and conference calls. Table by author. Note: Q2 FY2021 ended on July 31, 2020. YOY = year over year.

As the coronavirus spread across the globe earlier this year, businesses scrambled to operate remotely. That made the process of getting documents signed on paper impractical. As a result, organizations flocked to DocuSign for help. Top-line revenue growth, customers, and net dollar retention numbers have all improved significantly over the last several quarters. 

The company added 160,000 customers in the first half of its current fiscal year, including 24,000 enterprise and commercial customers, which drive the bulk (88%) of its revenue. With third-quarter revenue projected to be $358 million to $362 million -- a 44% year-over-year increase at the midpoint -- DocuSign looks to continue its impressive growth trend.

Numerous ways to expand

While hundreds of thousands of customers are already using DocuSign for their e-signature needs, management projects it has tapped only about 1% of the global businesses that could benefit from its platform. Customers come to the platform for urgent e-signature use cases, but often find there are numerous other ways that the technology can be put to use. With over 350 ready-to-use integrations, DocuSign's popular e-signature process can be embedded into enterprise tools such as Oracle,, and Workday, making this service even more sticky and difficult for customers to give up.

But e-signatures aren't the only thing DocuSign does. It has a product for the entire document agreement lifecycle called the Agreement Cloud. This end-to-end software suite enables companies to digitize their entire agreement process from initial creation through to managing the multitude of contracts throughout the company. With insights from its artificial-intelligence-powered search, robust analytics, and contract libraries, there's something for every large enterprise.

Finally, the company has embarked on specific industry solutions for real estate, life sciences, government, education, and more. These tailored software tools are helping to drive even more growth from industries with unique needs.

Red buy key on keyboard being pressed.

Image source: Getty images.

24,000 reasons to buy now

Remember the 24,000 new enterprise and commercial customers I mentioned earlier? Well, these large organizations present a massive opportunity to drive growth, as many of them are just now discovering the benefits of digital transformation with DocuSign's tools. These new customers represent a massive 32% increase from its base of 75,000 enterprise and commercial customers as of Jan. 31, 2020.

Over the next several years, these customers will spend more by expanding their use of e-signatures and may even move up to higher-value cloud subscription services. In turn, the Agreement Cloud platform will improve as more customers start to use it and provide the development team important insights on how to make its products even more useful.

The bottom line for investors

DocuSign is investing heavily in growth efforts and running its bottom line in the red. Even though it's posting net losses, DocuSign has $740 million of cash and investments on its balance sheet and consistently generates positive free cash flow, so it should be able to operate this way for years. The stock sports a lofty valuation of 33 times sales, but this growth stock is worth the premium and is the one stock I'd buy right now.

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.