Both Docusign DOCU and Coherent Corp. COHR are innovative technology companies reorienting their businesses strategically to seize emerging growth opportunities. DOCU is incorporating AI into its digital agreement platform, while COHR is focusing on next-gen photonics, semiconductors and AI-driven industries.

Growth-oriented investors may find the comparative analysis of these two disruptive tech stocks valuable for assessing their prospects.

The Case for Docusign

DOCU strategically integrated AI into its products and launched Intelligent Agreement Management (IAM) to help customers create, analyze, manage and automate agreements throughout the life cycle. This product reduces manual effort, propels execution and supports organizations in gaining visibility and control over their agreement data.

The product has clocked in a high adoption rate despite being in the early phase. In the fourth quarter of fiscal 2025, IAM contributed nearly 20% of direct sales. On the back of this technology, Docusign added 56 customers with annual contract value (ACV) outpacing the $300,000 threshold. This spurt of growth adds a shine in comparison with the lackluster nine customer additions in the preceding quarter. Such recovery is a testament to IAM’s efficacy and it is anticipated to bring about more deals with higher ACV.

The management stated that IAM is the fastest-growing new product in DOCU’s history. The body expects the product to generate a low-double-digit percentage proportion of the recurring subscription revenue base by the fourth quarter of fiscal 2026.

All in all, this technological advancement improves Docusign’s operations by minimizing friction for customers in their dealings, leading to higher efficiency, minimal errors and swifter turnaround times, improving customer satisfaction, acquisition and retention.

The Case for Coherent

With the growing demand for AI, traffic between data centers increases, calling the telecom industry to boost investments in higher-capacity interconnects, driving the need for optical transport networks. The surge in AI results in large data volume, making AI models demand faster and more effective data transmission. This has created a hospitable environment for Coherent’s products include 100G, 400G and 800G ZR/ZR+ transceivers, which significantly improve the efficiency of data transmission.

As the hyperscalers expanded AI training and inference workloads, the demand for 800G transceivers increased, providing a healthy contribution to the top line. Per management, 1.6T transceivers are expected to be the primary top-line contributor in 2025, suggesting a bandwidth for growth post the current 800G cycle. Customer evaluation has shown that the demand for 800G will not deteriorate despite the introduction of 1.5T.

On a different note, COHR has registered a 3X year-over-year growth in its indium phosphide (InP) output in the second quarter of fiscal 2025. InP is a crucial item for Electro-Absorption Modulated Laser and Continuous Wave lasers that power the high-speed optical transmission in AI data centers. Hence, the company has found itself amid an opportunity to expand, ensuring robust supply-chain control and cost benefits over competitors.

How Do Estimates Compare for DOCU & COHR?

The Zacks Consensus Estimate for Docusign’s fiscal 2026 sales is pegged at $3.1 billion, suggesting 5.2% year-over-year growth. The consensus estimate for earnings is pegged at $3.46, indicating a 2.5% decline from the preceding year’s actual. No estimates for fiscal 2026 have moved north in the past 60 days versus eight southward revisions.

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The Zacks Consensus Estimate for Coherent’s fiscal 2025 sales is pegged at $5.7 billion, suggesting 21.1% year-over-year growth. The consensus estimate for earnings is pegged at $3.47 per share, indicating a more than 100% year-over-year surge.  No estimates for fiscal 2025 have moved north in the past 60 days versus one southward revision.

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COHR Looks Way Cheaper Than Docusign

DOCU is trading at forward earnings multiple of 71.03X, higher than its 12-month median of 61.35X. COHR’s forward earnings multiple stands at 19.28X, lower than its median of 30.48X.

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Verdict

Both Docusign and Coherent are tech-driven disruptors banking on emerging prospects. DOCU has grabbed the opportunity to roll out products spiced with AI to improve customer experience. Conversely, COHR has witnessed the growing AI workload as a profitable avenue and introduced transceivers to facilitate efficient and swift data transmission. By capitalizing on emerging opportunities, both companies find themselves warrant cautious investor scrutiny prior to any move. However, it is safe to say that Coherent stands out as the stronger investment because it is cheaper and fundamentally stronger than Docusign.

DOCU and COHR both carry a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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