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DocuSign IAM Platform Needs to Show Clearer Proof of 'More Meaningful' Contribution to Growth, Morgan Stanley Says

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DocuSign IAM Platform Needs to Show Clearer Proof of 'More Meaningful' Contribution to Growth, Morgan Stanley Says

DocuSign's (DOCU) latest results showed progress in Intelligent Agreement Management, or IAM, though the platform needs to offer a clearer proof of "more meaningful" contribution to the company's overall growth, Morgan Stanley said in a note e-mailed Friday.

Late Thursday, the electronic signature company reported fiscal second-quarter results above Wall Street's views and raised its full-year annual recurring revenue, or ARR, growth and sales outlook. The artificial intelligence-native IAM platform represented 15.1% of total ARR as of July 31, compared with 12.6% as of April 30.

"Our (second-quarter) performance builds on a strong start to fiscal 2027, balancing operational efficiency with ongoing IAM platform expansion," DocuSign Chief Financial Officer Blake Grayson said on an earnings conference call, according to a transcript available on the company's website. "We remain encouraged by growing IAM adoption as we drive more value and efficiency for our customers."

Although the company's latest print and guidance showed "incremental" progress by IAM, more clarity is needed around the platform's true potential, Morgan Stanley said in a note to clients.

"We remain equal-weight and would look for clearer evidence of more meaningful IAM contribution to consolidated growth, alongside more tangible disclosure on IAM monetization and incrementality, before becoming more constructive," the brokerage said.

Morgan Stanley raised its price target on the DocuSign stock to $75 from $69.

The company's shares were up 3.1% in Friday late-afternoon trade. The stock has dropped 0.6% so far in 2026.

"While the qualitative commentary about IAM's progress is encouraging, management still did not quantify IAM pricing uplift or how much IAM is driving truly incremental spend versus migration from legacy eSignature," Morgan Stanley wrote.

DocuSign expects the IAM platform to represent 18% to 19% of total ARR exiting its fourth quarter, it said late Thursday.

Last month, Dropbox (DBX) reported better-than-expected second-quarter results. The company owns Dropbox Sign, a provider of e-signature workflows.

Adobe (ADBE), which offers the Acrobat Sign service, is scheduled to report results Thursday.

Price: $67.80, Change: $+1.83, Percent Change: +2.77%

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