Workflow
DOCU Vs COHR: Which Disruptive Tech Stock Has More Growth Ahead?
DOCUDocuSign(DOCU) ZACKS·2025-04-29 17:10

Core Viewpoint - Both Docusign (DOCU) and Coherent Corp. (COHR) are strategically reorienting their businesses to capitalize on emerging growth opportunities in technology, with DOCU focusing on AI integration in its digital agreement platform and COHR targeting next-gen photonics and AI-driven industries [1] Docusign (DOCU) - DOCU has integrated AI into its products, launching Intelligent Agreement Management (IAM) to enhance the creation, analysis, management, and automation of agreements, thereby reducing manual effort and improving execution [2] - IAM has achieved a high adoption rate, contributing nearly 20% of direct sales in Q4 of fiscal 2025, with 56 new customers surpassing an annual contract value (ACV) of 300,000,asignificantincreasefromthepreviousquarter′sninecustomeradditions[3]−ManagementreportsIAMasthefastest−growingproductinDOCU′shistory,expectingittogeneratealow−double−digitpercentageofrecurringsubscriptionrevenuebyQ4offiscal2026,enhancingoperationalefficiencyandcustomersatisfaction[4]CoherentCorp.(COHR)−ThedemandforAIisdrivingtheneedforhigher−capacityinterconnectsinthetelecomindustry,whichbenefitsCOHR′sproductslike100G,400G,and800GZR/ZR+transceiversthatimprovedatatransmissionefficiency[5]−AshyperscalersexpandAIworkloads,thedemandfor800Gtransceiversisincreasing,with1.6Ttransceiversexpectedtobeaprimarycontributortorevenuein2025,indicatinggrowthpotentialbeyondthecurrent800Gcycle[6]−COHRhasreporteda3Xyear−over−yeargrowthinindiumphosphide(InP)outputinQ2offiscal2025,positioningthecompanyforexpansionwithstrongsupply−chaincontrolandcostadvantages[7]FinancialEstimates−TheZacksConsensusEstimateforDocusign′sfiscal2026salesis300,000, a significant increase from the previous quarter's nine customer additions [3] - Management reports IAM as the fastest-growing product in DOCU's history, expecting it to generate a low-double-digit percentage of recurring subscription revenue by Q4 of fiscal 2026, enhancing operational efficiency and customer satisfaction [4] Coherent Corp. (COHR) - The demand for AI is driving the need for higher-capacity interconnects in the telecom industry, which benefits COHR's products like 100G, 400G, and 800G ZR/ZR+ transceivers that improve data transmission efficiency [5] - As hyperscalers expand AI workloads, the demand for 800G transceivers is increasing, with 1.6T transceivers expected to be a primary contributor to revenue in 2025, indicating growth potential beyond the current 800G cycle [6] - COHR has reported a 3X year-over-year growth in indium phosphide (InP) output in Q2 of fiscal 2025, positioning the company for expansion with strong supply-chain control and cost advantages [7] Financial Estimates - The Zacks Consensus Estimate for Docusign's fiscal 2026 sales is 3.1 billion, reflecting a 5.2% year-over-year growth, while earnings are estimated at 3.46,indicatinga2.53.46, indicating a 2.5% decline from the previous year [8] - For Coherent, the fiscal 2025 sales estimate is 5.7 billion, suggesting a 21.1% year-over-year growth, with earnings projected at $3.47 per share, representing over 100% year-over-year growth [9] Valuation Comparison - DOCU is trading at a forward earnings multiple of 71.03X, higher than its 12-month median of 61.35X, while COHR's forward earnings multiple is 19.28X, lower than its median of 30.48X, indicating that COHR appears more attractively valued [10] Conclusion - Both Docusign and Coherent are leveraging technology to address emerging market opportunities, with DOCU enhancing customer experience through AI and COHR capitalizing on the growing AI workload for efficient data transmission. However, COHR is viewed as a stronger investment due to its lower valuation and fundamental strength compared to DOCU [12]