Snowflake Inc. and DocuSign, Inc. are two prominent players in the software application industry, each driving innovation in cloud data management and digital agreement solutions. Snowflake’s data platform and DocuSign’s e-signature technology serve overlapping markets focused on digital transformation and efficiency. This comparison explores their growth potential and strategic positioning to help you identify which company offers the more compelling investment opportunity. Let’s dive in and discover which is best suited for your portfolio.
Table of contents
Companies Overview
I will begin the comparison between Snowflake Inc. and DocuSign, Inc. by providing an overview of these two companies and their main differences.
Snowflake Overview
Snowflake Inc. provides a cloud-based data platform designed to consolidate data into a single source of truth, enabling businesses to gain meaningful insights, build data-driven applications, and share data efficiently. Founded in 2012 and based in Bozeman, Montana, Snowflake serves organizations of various sizes and industries, positioning itself as a leader in cloud data management with a market cap of approximately 70B USD.
DocuSign Overview
DocuSign, Inc. specializes in electronic signature software and digital agreement management solutions. Headquartered in San Francisco and incorporated in 2003, DocuSign offers a broad suite of AI-powered contract lifecycle management tools and industry-specific cloud offerings to streamline agreement processes. The company targets enterprise and small businesses worldwide, holding a market cap near 11.4B USD.
Key similarities and differences
Both Snowflake and DocuSign operate in the technology sector, focusing on software applications that enhance business processes through cloud-based platforms. Snowflake emphasizes data consolidation and analytics, while DocuSign concentrates on digital signatures and contract workflow automation. Despite their shared industry, their core solutions address distinct aspects of enterprise digital transformation, reflected in their differing market capitalizations and product focuses.
Income Statement Comparison
This table compares the key income statement metrics of Snowflake Inc. and DocuSign, Inc. for their most recent fiscal year, offering a snapshot of their financial performance.
| Metric | Snowflake Inc. (SNOW) | DocuSign, Inc. (DOCU) |
|---|---|---|
| Market Cap | 70.4B | 11.4B |
| Revenue | 3.63B | 2.98B |
| EBITDA | -1.10B | 357M |
| EBIT | -1.28B | 249M |
| Net Income | -1.29B | 1.07B |
| EPS | -3.86 | 5.23 |
| Fiscal Year | 2025 | 2025 |
Income Statement Interpretations
Snowflake Inc.
Snowflake Inc. experienced strong revenue growth from 2021 to 2025, surging over 500% to reach $3.63B in 2025. Despite this, net income remained negative, with a widening loss of $1.29B in 2025. Gross margin held favorably at 66.5%, but operating and net margins were unfavorable and deteriorated further in the latest year, reflecting increased expenses outpacing revenue gains.
DocuSign, Inc.
DocuSign showed consistent revenue growth, doubling from 2021 to 2025 to $2.98B, with net income turning positive and reaching $1.07B in 2025. Gross margin was strong at 79.12%, while EBIT and net margins improved significantly, with net margin at a favorable 35.87%. The latest year saw continued margin expansion and robust EPS growth, indicating improved profitability and operational efficiency.
Which one has the stronger fundamentals?
DocuSign exhibits stronger fundamentals with predominantly favorable income statement metrics including positive net income and expanding margins. Snowflake’s rapid revenue growth is offset by persistent and increasing losses and unfavorable margins. Consequently, DocuSign’s stable profitability and margin improvements provide a more favorable income statement profile compared to Snowflake’s ongoing net losses.
Financial Ratios Comparison
The table below presents a side-by-side comparison of key financial ratios for Snowflake Inc. (SNOW) and DocuSign, Inc. (DOCU) based on their most recent fiscal year 2025 data.
| Ratios | Snowflake Inc. (SNOW) | DocuSign, Inc. (DOCU) |
|---|---|---|
| ROE | -42.9% | 53.3% |
| ROIC | -25.2% | 9.1% |
| P/E | -47.0 | 18.5 |
| P/B | 20.1 | 9.9 |
| Current Ratio | 1.75 | 0.81 |
| Quick Ratio | 1.75 | 0.81 |
| D/E (Debt-to-Equity) | 0.90 | 0.06 |
| Debt-to-Assets | 29.7% | 3.1% |
| Interest Coverage | -528 | 129 |
| Asset Turnover | 0.40 | 0.74 |
| Fixed Asset Turnover | 5.53 | 7.28 |
| Payout ratio | 0 | 0 |
| Dividend yield | 0% | 0% |
Interpretation of the Ratios
Snowflake Inc.
Snowflake’s financial ratios present a mixed picture with a slightly unfavorable overall evaluation. Key profitability metrics such as net margin (-35.45%) and return on equity (-42.86%) are weak, indicating ongoing losses and challenges in generating returns. Liquidity ratios are favorable (current and quick ratio around 1.75), but valuation metrics like price-to-book (20.13) raise concerns. Snowflake does not pay dividends, reflecting a reinvestment strategy during its growth phase.
DocuSign, Inc.
DocuSign shows relatively stronger financial ratios with a slightly favorable global opinion. Profitability ratios like net margin (35.87%) and return on equity (53.32%) are positive and robust, though price-to-book (9.87) is somewhat high and liquidity ratios are less strong (current ratio 0.81). The company does not pay dividends, likely prioritizing growth and reinvestment, supported by a low debt-to-equity ratio (0.06) and solid interest coverage.
Which one has the best ratios?
Comparing the two, DocuSign holds the advantage with more favorable profitability ratios and a healthier debt profile. Snowflake’s negative returns and high valuation multiples weigh against it despite decent liquidity. DocuSign’s stronger earnings and cash flow metrics suggest better operational efficiency, while both companies refrain from dividend payments, focusing on growth strategies.
Strategic Positioning
This section compares the strategic positioning of Snowflake Inc. and DocuSign, Inc., including Market position, Key segments, and Exposure to technological disruption:
Snowflake Inc.
- Market leader in cloud-based data platforms with significant competitive pressure in software applications.
- Key segments focus on data cloud products and professional services driving revenue growth.
- Faces disruption risks from evolving cloud technologies but focuses on data consolidation and sharing.
DocuSign, Inc.
- Leading provider of electronic signature software with strong presence in digital agreement management.
- Core business includes subscription-based e-signature solutions and professional services.
- Exposed to automation and AI in contract lifecycle management and document processing.
Snowflake Inc. vs DocuSign, Inc. Positioning
Snowflake pursues a diversified strategy centered on cloud data platforms, while DocuSign concentrates on electronic signature and workflow automation. Snowflake’s broader product base contrasts with DocuSign’s specialized digital agreement services, each with distinct market dynamics and technological challenges.
Which has the best competitive advantage?
DocuSign shows a slightly favorable moat with increasing profitability and ROIC growth, indicating improving competitive positioning. Snowflake currently has a very unfavorable moat with declining ROIC and value destruction, suggesting weaker competitive advantage.
Stock Comparison
The past year shows contrasting price movements for Snowflake Inc. and DocuSign, Inc., with Snowflake experiencing a bearish trend and DocuSign showing a bullish trajectory, both facing recent declines in trading activity.
Trend Analysis
Snowflake Inc. recorded an 8.27% price decrease over the past 12 months, signaling a bearish trend with decelerating momentum and high volatility, ranging between 108.56 and 274.88. DocuSign, Inc. posted a 9.63% gain over the same period, indicating a bullish trend despite deceleration and moderate volatility, with prices fluctuating from 50.84 to 106.99. Comparing both, DocuSign delivered higher market performance over the year, while Snowflake’s stock declined notably.
Target Prices
Analysts present a clear consensus on target prices for Snowflake Inc. and DocuSign, Inc., indicating potential upside from current levels.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Snowflake Inc. | 325 | 237 | 281.86 |
| DocuSign, Inc. | 88 | 70 | 76.86 |
The consensus targets for Snowflake and DocuSign suggest potential gains of approximately 34% and 36% respectively versus their current prices of 210.38 and 56.71 USD, reflecting optimistic analyst expectations.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Snowflake Inc. and DocuSign, Inc.:
Rating Comparison
Snowflake Inc. Rating
- Rating: C- indicating a very favorable overall rating status.
- Discounted Cash Flow Score: 3, a moderate valuation metric.
- ROE Score: 1, very unfavorable efficiency in equity usage.
- ROA Score: 1, very unfavorable asset utilization.
- Debt To Equity Score: 1, very unfavorable financial risk.
- Overall Score: 1, very unfavorable overall financial standing.
DocuSign, Inc. Rating
- Rating: B+ reflecting a very favorable overall rating.
- Discounted Cash Flow Score: 5, indicating very favorable valuation.
- ROE Score: 4, favorable return on equity performance.
- ROA Score: 4, favorable effectiveness in asset use.
- Debt To Equity Score: 3, moderate financial risk profile.
- Overall Score: 3, moderate overall financial standing.
Which one is the best rated?
Based on the provided data, DocuSign holds superior ratings and scores across all key financial metrics compared to Snowflake. DocuSign’s overall rating and valuation indicators are notably stronger, reflecting a more favorable analyst opinion.
Scores Comparison
Here is the comparison of financial scores for Snowflake Inc. and DocuSign, Inc.:
SNOW Scores
- Altman Z-Score: 5.36, indicating a safe financial zone with low bankruptcy risk.
- Piotroski Score: 4, classified as average financial strength.
DOCU Scores
- Altman Z-Score: 4.43, also in the safe zone with low bankruptcy risk.
- Piotroski Score: 5, slightly higher average financial strength.
Which company has the best scores?
Both companies have Altman Z-Scores in the safe zone, indicating low bankruptcy risk. DocuSign has a marginally higher Piotroski Score of 5 versus Snowflake’s 4, suggesting a slightly stronger financial health based on this measure.
Grades Comparison
The grades comparison for Snowflake Inc. and DocuSign, Inc. from major financial institutions is as follows:
Snowflake Inc. Grades
The table below summarizes recent grades and actions from reputable grading companies for Snowflake Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Downgrade | Equal Weight | 2026-01-12 |
| Argus Research | Upgrade | Buy | 2026-01-08 |
| Citigroup | Maintain | Buy | 2025-12-08 |
| Wells Fargo | Maintain | Overweight | 2025-12-04 |
| Keybanc | Maintain | Overweight | 2025-12-04 |
| Piper Sandler | Maintain | Overweight | 2025-12-04 |
| Morgan Stanley | Maintain | Overweight | 2025-12-04 |
| Wedbush | Maintain | Outperform | 2025-12-04 |
| Deutsche Bank | Maintain | Buy | 2025-12-04 |
| Cantor Fitzgerald | Maintain | Overweight | 2025-12-04 |
Snowflake Inc.’s grades predominantly indicate buy or overweight ratings, with one recent downgrade to equal weight, reflecting generally positive sentiment with cautious moderation.
DocuSign, Inc. Grades
The table below summarizes recent grades and actions from reputable grading companies 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, Inc. consistently received neutral, hold, or sector perform grades, indicating a cautious and balanced outlook without strong directional bias.
Which company has the best grades?
Snowflake Inc. has received significantly more favorable grades, mostly buy and overweight ratings, compared to DocuSign’s neutral and hold assessments. This suggests that investors might view Snowflake as having stronger growth or value potential, whereas DocuSign’s grades imply more moderate expectations and possibly lower risk tolerance.
Strengths and Weaknesses
Below is a comparison of key strengths and weaknesses for Snowflake Inc. (SNOW) and DocuSign, Inc. (DOCU) based on their latest financial and strategic data.
| Criterion | Snowflake Inc. (SNOW) | DocuSign, Inc. (DOCU) |
|---|---|---|
| Diversification | Primarily product-driven with growing services segment; moderate diversification | Strong subscription-based model with professional services; well diversified revenue streams |
| Profitability | Negative net margin (-35.45%), negative ROIC (-25.24%), value destroying | Positive net margin (35.87%), neutral ROIC (9.09%), slightly favorable value creation |
| Innovation | High product revenue growth but declining profitability suggests innovation challenges | Growing ROIC and profitability indicate effective innovation and operational efficiency |
| Global presence | Expanding but with financial stress limiting scale | Established global presence with steady revenue and profitability growth |
| Market Share | Rapid revenue growth in data platform market but struggling with financial metrics | Solid position in e-signature and digital transaction management markets |
Key takeaways: Snowflake shows strong revenue growth but struggles with profitability and value creation, indicating financial risks despite innovation potential. DocuSign demonstrates healthier profitability and improving returns, making it a more balanced investment option with moderate growth prospects.
Risk Analysis
Below is a comparative table summarizing key risks for Snowflake Inc. (SNOW) and DocuSign, Inc. (DOCU) based on the latest 2025 data:
| Metric | Snowflake Inc. (SNOW) | DocuSign, Inc. (DOCU) |
|---|---|---|
| Market Risk | Beta 1.14 indicates moderate volatility. | Beta 0.99 indicates near market volatility. |
| Debt Level | Debt-to-Equity 0.9 (neutral); Debt-to-Assets 29.7% (favorable) | Very low debt-to-equity 0.06; Debt-to-Assets 3.1% (favorable) |
| Regulatory Risk | Moderate, due to international data compliance requirements. | Moderate, with emphasis on data privacy and e-signature regulations. |
| Operational Risk | Negative net margin (-35.5%) and low ROE (-42.9%) suggest operational challenges. | Positive net margin (35.9%) and high ROE (53.3%) indicate stable operations. |
| Environmental Risk | Low, software industry with limited direct environmental impact. | Low, similar software sector profile. |
| Geopolitical Risk | Moderate, international presence could expose to trade tensions. | Moderate, similar exposure due to global client base. |
Snowflake’s main risks are operational inefficiencies and financial losses, despite a strong Altman Z-score indicating low bankruptcy risk. DocuSign shows stronger profitability and lower leverage but faces market pressure reflected in recent stock price declines. Both companies share moderate regulatory and geopolitical risks typical for global tech firms.
Which Stock to Choose?
Snowflake Inc. (SNOW) shows strong revenue growth at 29.21% for 2025, but profitability remains negative with a net margin of -35.45% and declining ROIC compared to WACC. The financial ratios are slightly unfavorable overall, with some liquidity strengths yet poor returns and high valuation multiples; its rating stands at very favorable.
DocuSign, Inc. (DOCU) presents moderate revenue growth at 7.78% with positive profitability metrics, including a 35.87% net margin and improving ROIC trending above WACC. Financial ratios are slightly favorable globally, supported by strong returns on equity and assets, low debt levels, and a very favorable rating reflecting improved income statement performance.
Investors focused on growth may find Snowflake’s rapid revenue expansion appealing despite profitability challenges, while those prioritizing stability and improving profitability might consider DocuSign’s stronger income statement and financial ratios as slightly more favorable. The choice could depend on one’s risk tolerance and investment horizon.
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 Snowflake Inc. and DocuSign, Inc. to enhance your investment decisions:
