The shares of DocuSign, Inc. (NASDAQ:DOCU) and ZTO Express (Cayman) Inc. (NYSE:ZTO) were among the active stocks of the last trading sessions. DocuSign, Inc. (NASDAQ:DOCU) declined to -3.98% closing at the price of $41.51 whereas the shares of ZTO Express (Cayman) Inc. (NYSE:ZTO) declined -0.72% with the decrease of -0.11 points closing at the price of $15.24. DocuSign, Inc. has currently increase 0% in its stock over the period of 6-months while its rival ZTO Express (Cayman) Inc. subtracted -1.8% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of DocuSign, Inc. (NASDAQ:DOCU) is 16.2% while the ROI of ZTO Express (Cayman) Inc. (NYSE:ZTO) is 14.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, DOCU’s EBITDA Margin is -21.52 whereas ZTO’s is 13.76.
Both the profitability ratios suggest a mixed sentiment for DocuSign, Inc. (NASDAQ:DOCU) and ZTO Express (Cayman) Inc. (NYSE:ZTO).
EPS & Surprise Factor
DocuSign, Inc. (NASDAQ:DOCU) reported $0.03/share EPS for the previous quarter where analysts were predicting an EPS to be $0.01/share Thus beating the analyst Estimates with a Surprise Factor of 200 Percent. While, ZTO Express (Cayman) Inc. (NYSE:ZTO) reported EPS of $0.22/share in the last quarter. The analysts projected EPS of $0.21/share depicting a Surprise of 4.8 Percent.
Taking a look at Earnings per Share, DocuSign, Inc. tends to be beating the analyst estimates more than ZTO Express (Cayman) Inc.. so DOCU is more profitable than ZTO.
Technical Analysis of DocuSign, Inc. & ZTO Express (Cayman) Inc.
Moving average convergence divergence (MACD) shows that DocuSign, Inc. (NASDAQ:DOCU) is on a PRICE RELATIVITY trend While ZTO Express (Cayman) Inc. (NYSE:ZTO) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the DocuSign, Inc. was in territory and ZTO Express (Cayman) Inc. was in BEARISH territory.
DOCU’s current statistics gauge that the stock candle is with volatility. While ZTO’s candle is BEARISH with MEDIUM.
EPS Growth Rate: DOCU’s 0% versus ZTO’s 3.53%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of DocuSign, Inc. (NASDAQ:DOCU) is predicted at 0% while ZTO Express (Cayman) Inc. (NYSE:ZTO) stands at 3.53%. These numbers suggest that ZTO is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of DOCU stands at 2.5 while ZTO is at 4.7 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.1 for DOCU and 1.9 for ZTO which means DOCU has Hold rating whereas ZTO has Buy rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for DOCU is $66.71 which is 37.78% of its current price while ZTO has price target of 23.42 which is 34.93% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
DOCU currently has price to earning P/E ratio of 0 whereas ZTO has 18.81 while the forward P/E ratio for the prior stands at 273.09 and for the later it depicts the value of 15.5.
The price to Book P/B for DOCU is 9.27, Price to Sale is at 10.93 and for ZTO these ratios stand at 2.51 and 5.52.