It can be unnerving seeing the broad S&P 500 market index down over 2% in a single day, but it’s not all bad news.
Online broking giant Interactive Brokers is no stranger to wild stock market swings.
But during the early parts of 2021, it experienced an unprecedented growth phase in its business amid the meme-stock frenzy driven by retail traders.
When it comes to broking, the amount of financial assets in client accounts is key, because brokers typically earn fees based on the volume traded.
By comparison, the S&P 500 trades at a multiple of 28, and the Nasdaq 100 a multiple of 35, so the stock is much cheaper than the overall market.
As the leading digital signature platform, investors in its stock have been rewarded with returns of 230% since January 2020, as the stay-at-home economy demanded innovative new tools to keep the economy turning.
Yet even if there isn’t one, its diversification into other business verticals over the last couple of years makes it a favorable long-term investment.
DocuSign’s ramp-up in earnings per share comes partly from diversifying its business, and partly from achieving scale through its more than 1 million paying customers.