In the dynamic software industry, DocuSign, Inc. (DOCU) and Dayforce Inc (DAY) represent two innovative leaders specializing in digital workflow solutions. DocuSign excels in electronic signature and contract management, while Dayforce focuses on human capital management through cloud platforms. Both companies drive technological advancement with overlapping market targets, making their comparison essential. This article will help you decide which company holds the greatest potential for your investment portfolio.
Table of contents
Companies Overview
I will begin the comparison between DocuSign and Dayforce by providing an overview of these two companies and their main differences.
DocuSign Overview
DocuSign, Inc. specializes in electronic signature software, enabling businesses to digitally prepare, sign, and manage agreements globally. It offers a broad suite of AI-driven contract lifecycle management tools alongside industry-specific cloud solutions for sectors such as real estate and life sciences. Founded in 2003 and headquartered in San Francisco, DocuSign serves enterprise to small businesses, trading on NASDAQ with a market cap of about 11.4B USD.
Dayforce Overview
Dayforce Inc operates as a human capital management software provider with a cloud platform delivering HR, payroll, benefits, and talent management services. It targets both large enterprises and small businesses through solutions like Dayforce and Powerpay, with additional payroll bureau services. Incorporated in 2013 and based in Minneapolis, Dayforce trades on the NYSE and holds a market cap near 11.1B USD.
Key similarities and differences
Both companies operate in the software application industry and focus on cloud-based solutions serving business clients internationally. DocuSign’s expertise lies in digital agreements and contract management, while Dayforce concentrates on human capital management and payroll. They differ in market focus but share a technology-driven approach with sales through direct and third-party channels, supporting enterprise and small business segments.
Income Statement Comparison
The following table presents the key income statement metrics for DocuSign, Inc. and Dayforce Inc for their most recent fiscal years, providing a snapshot of their financial performance.
| Metric | DocuSign, Inc. | Dayforce Inc |
|---|---|---|
| Market Cap | 11.36B | 11.07B |
| Revenue | 2.98B | 1.76B |
| EBITDA | 357M | 288M |
| EBIT | 249M | 78.2M |
| Net Income | 1.07B | 18.1M |
| EPS | 5.23 | 0.11 |
| Fiscal Year | 2025 | 2024 |
Income Statement Interpretations
DocuSign, Inc.
DocuSign’s revenue doubled from 2021 to 2025, accompanied by a strong net income rebound from negative to $1.07B in 2025. Gross margin remained high and favorable at 79.12%, while net margin surged to 35.87%. The 2025 fiscal year showed solid revenue growth of 7.78% with significant improvements in EBIT and net margins, reflecting enhanced profitability and operational efficiency.
Dayforce Inc
Dayforce experienced steady revenue growth, rising 108.9% over the period to $1.76B in 2024. However, net income remains modest at $18.1M with a slim net margin of 1.03%. Gross margin was favorable at 46.14%, but EBIT declined by 40.8% in 2024, indicating margin pressure. The company saw unfavorable operating expense growth relative to revenue, impacting profitability despite top-line gains.
Which one has the stronger fundamentals?
DocuSign demonstrates stronger fundamentals with higher margins, significant net income growth, and improving profitability metrics in 2025. Dayforce shows solid revenue progression but struggles with margin compression and declining EBIT. DocuSign’s overall margin stability and income growth profiles are more favorable, while Dayforce faces challenges in cost management and sustainable earnings expansion.
Financial Ratios Comparison
The following table presents a side-by-side comparison of key financial ratios for DocuSign, Inc. (DOCU) and Dayforce Inc (DAY) based on their most recent fiscal year data, providing insight into their financial performance and stability.
| Ratios | DocuSign, Inc. (2025) | Dayforce Inc (2024) |
|---|---|---|
| ROE | 53.3% | 0.7% |
| ROIC | 9.1% | 1.3% |
| P/E | 18.5 | 633.3 |
| P/B | 9.87 | 4.50 |
| Current Ratio | 0.81 | 1.13 |
| Quick Ratio | 0.81 | 1.13 |
| D/E (Debt to Equity) | 0.06 | 0.48 |
| Debt-to-Assets | 3.1% | 13.5% |
| Interest Coverage | 129.0 | 2.56 |
| Asset Turnover | 0.74 | 0.19 |
| Fixed Asset Turnover | 7.28 | 7.46 |
| Payout Ratio | 0 | 0 |
| Dividend Yield | 0 | 0 |
This comparison highlights significant differences in profitability, leverage, and liquidity metrics between the two companies for investors and traders to consider.
Interpretation of the Ratios
DocuSign, Inc.
DocuSign shows a slightly favorable profile with strong net margin at 35.87% and a high return on equity of 53.32%, indicating effective profitability and shareholder value creation. However, the current ratio at 0.81 signals potential liquidity concerns, and a high price-to-book ratio of 9.87 may indicate overvaluation. The company does not pay dividends, likely prioritizing reinvestment and growth over shareholder payouts.
Dayforce Inc
Dayforce displays an unfavorable ratio set with a low net margin of 1.03% and weak returns such as a 0.71% return on equity, reflecting limited profitability. The high price-to-earnings ratio of 633.29 signals market expectation challenges, while liquidity metrics like a current ratio of 1.13 are neutral to favorable. This company also does not pay dividends, likely focusing on reinvestment and expansion.
Which one has the best ratios?
Comparing both, DocuSign holds a stronger financial stance with higher profitability ratios and better leverage management, despite some liquidity and valuation issues. Dayforce presents more unfavorable profitability and valuation ratios, alongside weaker asset utilization. Overall, DocuSign’s ratios appear more favorable than Dayforce’s based on the available data.
Strategic Positioning
This section compares the strategic positioning of DocuSign and Dayforce, focusing on Market position, Key segments, and Exposure to disruption:
DocuSign, Inc.
- Leading electronic signature software with global reach, facing competitive pressure in SaaS applications.
- Key segments include e-signature solutions, CLM, AI-driven contract management, serving enterprise to small businesses.
- Incorporates AI in contract analysis and digital workflows, exposed to tech disruption in cloud and AI-enhanced software.
Dayforce Inc
- Human capital management software with strong presence in payroll and workforce management, amid competitive industry.
- Key segments cover cloud HCM platform, payroll, benefits, and talent management, targeting small to large businesses.
- Cloud-based HCM solutions with ongoing innovation, facing disruption risks from evolving HR tech and cloud platforms.
DocuSign vs Dayforce Positioning
DocuSign focuses on digital agreement management with diversified AI-driven offerings, whereas Dayforce concentrates on human capital management and payroll solutions. DocuSign’s broader service range contrasts with Dayforce’s focused HR platform, each facing specific market challenges.
Which has the best competitive advantage?
Both companies show growing profitability but are shedding value relative to their capital costs. DocuSign’s slightly favorable moat contrasts with Dayforce’s slightly unfavorable status, indicating a more stable competitive advantage for DocuSign based on ROIC trends.
Stock Comparison
The stock price movements over the past year reveal contrasting trends between DocuSign, Inc. and Dayforce Inc, with DocuSign showing a notable bullish trend despite recent deceleration, while Dayforce exhibits a bearish overall trend with slight recent recovery.
Trend Analysis
DocuSign, Inc. experienced a 9.63% price increase over the past 12 months, indicating a bullish trend with deceleration. The stock ranged from a low of 50.84 to a high of 106.99, with overall volatility measured by a 12.98 std deviation.
Dayforce Inc recorded a -3.16% price change over the same period, reflecting a bearish trend with deceleration. The price fluctuated between 49.46 and 81.14, with moderate volatility at a 7.84 std deviation.
Comparatively, DocuSign outperformed Dayforce in market performance over the past year, showing a positive return against Dayforce’s negative trend.
Target Prices
Analysts provide a clear target price consensus for both DocuSign, Inc. and Dayforce Inc, reflecting moderate upside potential.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| DocuSign, Inc. | 88 | 70 | 76.86 |
| Dayforce Inc | 70 | 70 | 70 |
DocuSign’s target consensus at 76.86 USD suggests an upside of around 36% from its current price of 56.71 USD. Dayforce’s consensus target of 70 USD is slightly above its current price of 69.16 USD, indicating limited near-term growth expected by analysts.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for DocuSign, Inc. and Dayforce Inc:
Rating Comparison
DocuSign, Inc. Rating
- Rating: B+, classified as Very Favorable
- Discounted Cash Flow Score: 5, indicating Very Favorable DCF
- ROE Score: 4, Favorable efficiency in generating profit
- ROA Score: 4, Favorable asset utilization
- Debt To Equity Score: 3, Moderate financial risk
- Overall Score: 3, Moderate overall financial standing
Dayforce Inc Rating
- Rating: C-, also noted as Very Favorable
- Discounted Cash Flow Score: 2, showing Moderate DCF
- ROE Score: 1, Very Unfavorable efficiency
- ROA Score: 1, Very Unfavorable asset utilization
- Debt To Equity Score: 2, Moderate financial risk
- Overall Score: 1, Very Unfavorable overall financial standing
Which one is the best rated?
Based strictly on the data, DocuSign holds a higher rating (B+) and generally better scores across key financial metrics compared to Dayforce’s C-. DocuSign’s superior Discounted Cash Flow, ROE, and ROA scores position it as the better rated company.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for Docu and Dayforce:
DOCU Scores
- Altman Z-Score: 4.43, indicating a safe zone with low bankruptcy risk.
- Piotroski Score: 5, reflecting average financial strength.
DAY Scores
- Altman Z-Score: 1.24, indicating distress zone with high bankruptcy risk.
- Piotroski Score: 5, reflecting average financial strength.
Which company has the best scores?
Docu has a significantly higher Altman Z-Score, placing it in the safe zone, while Dayforce is in distress. Both share the same average Piotroski Score of 5. Therefore, Docu shows stronger financial stability based on these scores.
Grades Comparison
Here is the comparison of the latest available grades from recognized grading companies for both companies:
DocuSign, Inc. Grades
This table summarizes recent grades and rating actions from major financial institutions for DocuSign, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | Maintain | Sector Perform | 2026-01-05 |
| Evercore ISI Group | Maintain | In Line | 2025-12-05 |
| UBS | Maintain | Neutral | 2025-12-05 |
| Wells Fargo | Maintain | Equal Weight | 2025-12-05 |
| Piper Sandler | Maintain | Neutral | 2025-12-05 |
| RBC Capital | Maintain | Sector Perform | 2025-12-05 |
| JP Morgan | Maintain | Neutral | 2025-12-05 |
| B of A Securities | Maintain | Neutral | 2025-12-05 |
| Needham | Maintain | Hold | 2025-12-05 |
| Baird | Maintain | Neutral | 2025-12-05 |
DocuSign’s grades predominantly show a consensus around “Hold” or equivalent, with no recent upgrades or downgrades.
Dayforce Inc Grades
This table summarizes recent grades and rating actions from major financial institutions for Dayforce Inc:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Needham | Maintain | Hold | 2025-10-30 |
| Stifel | Downgrade | Hold | 2025-09-19 |
| Citigroup | Downgrade | Neutral | 2025-09-17 |
| Wells Fargo | Upgrade | Equal Weight | 2025-08-22 |
| BMO Capital | Downgrade | Market Perform | 2025-08-22 |
| Keybanc | Downgrade | Sector Weight | 2025-08-22 |
| Needham | Downgrade | Hold | 2025-08-22 |
| Barclays | Maintain | Equal Weight | 2025-08-22 |
| Deutsche Bank | Maintain | Hold | 2025-08-22 |
| Jefferies | Maintain | Hold | 2025-08-21 |
Dayforce’s ratings show a downward trend with several downgrades, moving mostly toward neutral to hold ratings.
Which company has the best grades?
DocuSign, Inc. has consistently maintained a “Hold” consensus with no downgrades, while Dayforce Inc has experienced multiple downgrades toward more cautious ratings. This suggests a relatively more stable outlook in analyst grades for DocuSign, which may influence investor confidence differently between the two.
Strengths and Weaknesses
Below is a comparative overview of key strengths and weaknesses for DocuSign, Inc. (DOCU) and Dayforce Inc (DAY) based on the latest financial and operational data.
| Criterion | DocuSign, Inc. (DOCU) | Dayforce Inc (DAY) |
|---|---|---|
| Diversification | Moderate: Mainly subscription and professional services; limited product lines. | Moderate: Cloud-based HR/payroll services with recurring revenue focus. |
| Profitability | Strong net margin (35.87%) and ROE (53.32%), neutral ROIC (9.09%). | Very low net margin (1.03%) and ROE (0.71%), unfavorable ROIC (1.31%). |
| Innovation | Growing ROIC trend reflects improving efficiency and product competitiveness. | Growing ROIC trend but overall value destroying; innovation improving but still unprofitable. |
| Global presence | Established global footprint with expanding subscription base. | Growing global reach via cloud services but still scaling. |
| Market Share | Strong presence in e-signature market with steady subscription revenue growth. | Significant in cloud HR/payroll niche but with smaller market penetration. |
Key takeaway: DocuSign demonstrates stronger profitability and a slightly favorable competitive position with consistent revenue growth, while Dayforce, despite improving operational efficiency, still struggles with profitability and overall value creation. Investors should weigh DocuSign’s stability against Dayforce’s higher risk but potential for turnaround.
Risk Analysis
Below is a comparative table summarizing key risk metrics for DocuSign, Inc. (DOCU) and Dayforce Inc (DAY) as of 2025 and 2024 respectively:
| Metric | DocuSign, Inc. (DOCU) | Dayforce Inc (DAY) |
|---|---|---|
| Market Risk (Beta) | 0.99 (moderate) | 1.18 (higher) |
| Debt level (D/E) | 0.06 (low, favorable) | 0.48 (moderate, favorable) |
| Regulatory Risk | Moderate (tech sector compliance) | Moderate (HCM regulatory environment) |
| Operational Risk | Moderate (software reliability) | Moderate (platform integration complexity) |
| Environmental Risk | Low | Low |
| Geopolitical Risk | Moderate (global operations) | Moderate (global operations) |
DocuSign shows lower financial leverage and market volatility compared to Dayforce, which faces higher operational and market risks. DocuSign’s strong interest coverage and safe Altman Z-score (4.43) suggest low bankruptcy risk, while Dayforce’s distress zone Z-score (1.24) and weaker profitability ratios indicate heightened financial vulnerability. Investors should weigh Dayforce’s elevated market beta and less favorable earnings metrics carefully against growth prospects.
Which Stock to Choose?
DocuSign, Inc. (DOCU) shows a favorable income evolution with a 7.78% revenue growth in 2025 and strong profitability, including a 35.87% net margin and 53.32% ROE. The company carries low debt (D/E 0.06) and holds a B+ rating with a slightly favorable overall financial ratio profile.
Dayforce Inc (DAY) experienced robust revenue growth of 16.27% in 2024 but displays weaker profitability, with a 1.03% net margin and 0.71% ROE. Its debt levels are higher (D/E 0.48), and despite a very favorable rating label (C-), the global financial ratios evaluation is unfavorable, reflecting challenges in operational efficiency.
Investors prioritizing growth and strong profitability might find DocuSign’s financial metrics and rating more appealing, while those with tolerance for higher debt and volatility, focusing on potential turnaround, might consider Dayforce’s improving income but unfavorable ratios as a riskier profile.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of DocuSign, Inc. and Dayforce Inc to enhance your investment decisions:
