Critical Comparison: 8X8 (NASDAQ:EGHT) & Docusign (NASDAQ:DOCU)

8X8 (NASDAQ:EGHT) and Docusign (NASDAQ:DOCU) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.

Earnings & Valuation

This table compares 8X8 and Docusign”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
8X8	$735.75 million	0.35	$1.65 million	$0.02	92.00
Docusign	$3.22 billion	2.58	$309.08 million	$1.54	28.23

Docusign has higher revenue and earnings than 8X8. Docusign is trading at a lower price-to-earnings ratio than 8X8, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

94.0% of 8X8 shares are owned by institutional investors. Comparatively, 77.6% of Docusign shares are owned by institutional investors. 2.0% of 8X8 shares are owned by insiders. Comparatively, 0.6% of Docusign shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for 8X8 and Docusign, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
8X8	1	1	1	0	2.00
Docusign	1	15	3	0	2.11

8X8 presently has a consensus target price of $2.45, indicating a potential upside of 33.15%. Docusign has a consensus target price of $60.27, indicating a potential upside of 38.64%. Given Docusign’s stronger consensus rating and higher probable upside, analysts clearly believe Docusign is more favorable than 8X8.

Risk and Volatility

8X8 has a beta of 1.83, suggesting that its stock price is 83% more volatile than the S&P 500. Comparatively, Docusign has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Profitability

This table compares 8X8 and Docusign’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
8X8	0.22%	25.77%	5.30%
Docusign	9.59%	17.48%	8.34%

Summary

Docusign beats 8X8 on 9 of the 14 factors compared between the two stocks.

About 8X8

8×8, Inc. engages in the provision of enterprise communication solutions. It offers solutions to the business services, education, financial services, government, healthcare, and manufacturing industries. The company was founded in February 1987 and is headquartered in Campbell, CA.

About Docusign

DocuSign, Inc. provides electronic signature solution in the United States and internationally. The company provides e-signature solution that enables sending and signing of agreements on various devices; Contract Lifecycle Management (CLM), which automates workflows across the entire agreement process; Document Generation streamlines the process of generating new, custom agreements; and Gen for Salesforce, which allows sales representatives to automatically generate agreements with a few clicks from within Salesforce. It also provides Identify, a signer-identification option for checking government-issued IDs; Standards-Based Signatures, which support signatures that involve digital certificates; Monitor that uses advanced analytics to track DocuSign eSignature web, mobile, and API account; Notary which enables notaries public to conduct remote online notarization transactions; and Web Forms, a web forms that quickly draft agreements using pre-populated data from completed forms or external systems via APIs. In addition, the company offers Rooms for Real Estate that provides a way for brokers and agents to manage the entire real estate transaction digitally. Signature and CLM are FedRAMP, an authorized version of DocuSign eSignature for U.S. federal government agencies; and life sciences modules that support compliance with the electronic signature practices. The company sells its products through direct and partner-assisted sales, and digital self-service purchasing. DocuSign, Inc. was incorporated in 2003 and is headquartered in San Francisco, California.