DocuSign (DOCU) has the right strategy in place to support long-term double-digit growth but fiscal 2027 is likely to be a transition year, BofA Securities said in a Tuesday note.

The brokerage said the company's revenue growth has stagnated in the high single digits for the past 10 quarters as the e-signature market matures.

DocuSign is expanding into intelligent agreement management but an inflection in growth is not yet apparent, the firm said.

BofA said DocuSign must convince customers both to adopt its platform and recognize agreement management as a new product category capable of delivering meaningful return on investment, a process likely to involve longer sales cycles and increased customer education.

Sustainable acceleration depends on ramping enterprise adoption of the platform and stronger annual contract value expansion, according to the note.

The investment firm also said AI-related competition remains a key overhang, with document analysis tools from large AI and software companies adding to the pressure on shares.

BofA reinstated coverage on DocuSign with an underperform rating and a $52 price objective.

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