Investors are abandoning San Francisco-based DocuSign (DOCU) on Friday after Citi senior analyst Tyler Radke turned bearish on the company.
When Radke downgraded DOCU to “Neutral” and cut his price target nearly in half, DocuSign’s Relative Strength Index (14-day) fell to the mid-30s, indicating that the bearish momentum could soon run out.
DocuSign stock has lagged badly in 2026, currently down nearly 40% from its year-to-date high.
In a research note dated April 10, Radke cited a notable shift in the application layer software landscape. Their main concern is the revenues of fast-growing private AI companies, which are now starting to surpass incumbents.
However, the Citi analyst acknowledged that DocuSign remains a leader in digital deals, but said it lacks “interesting 12-month catalysts” to justify a bullish view.
According to him, the evolution of AI agents is fundamentally reshaping workflows, potentially commoditizing e-signature services and disrupting the traditional position-based licensing models on which DOCU relies.
The broader bearish thesis on DocuSign stock is underpinned by a combination of stagnant growth and valuation concerns.
Despite a recent improvement in profits, the company’s net income over the past 12 months fell an alarming 70%, indicating it is struggling to maintain pandemic-era momentum.
Investors also remain wary of significant insider sales, as top executives have dumped millions of company shares in early 2026.
Still, DOCU trades at a forward price-to-earnings (P/E) multiple of nearly 27 times, which seems overstated given that the company is at significant risk of AI disruption.
However, investors should note that other Wall Street firms disagree with Citi on DOCU stock, betting that the company’s new intelligent deal management (IAM) platform positions it well to address increasingly tight IT budgets and stiff competition from AI-native startups.
According to Barchart, DocuSign’s consensus rating is currently a “Moderate Buy,” with an average price target of around $62, indicating nearly 40% upside potential from here.