Sometimes,
we only wish to sign a doc and get some money (it’s not a recommendation, and
don’t try this at home). But generally, it’s exactly what DocuSign facilitates
– electronic document processing. The company showed impressive results in its
latest report, but it turns out that it wasn’t enough to spur positive
movements in the charts. Let’s find an answer to the question of why everything
is so sad (or probably not so sad).
After
releasing their second-quarter 2023 report, DocuSign stock has already dropped
several times. You can see it in the chart below. But could this low point
present an excellent trading opportunity? Anyway, if you want to find trade
ideas, you can use special tools, for example stock
screener to generate lists of stocks that match your criteria.
Honestly,
the previous chart doesn’t quite illustrate the depth of this downturn. So,
we’ve prepared another chart demonstrating DocuSign stock performance over the
last five years, including several notable highlights.
Following the Covid highs, DocuSign stock has
been on an endless decline. It felt like a better-than-expected report could
change the situation. But it didn’t manage to.
The
company reported a revenue of $687 million, surpassing estimates of $677
million: it manifests a 1.5% increase. Earnings per share also beat forecasts –
72 cents compared to the expected 66 cents. Moreover, DocuSign raised its
full-year revenue expectations from $2.71-2.73 billion to $2.73-2.74 billion.
All
these figures seem to be commendable results, especially during these uncertain
times worldwide. However, market participants and analysts paid their attention
to other aspects. One of them is weakening net recurring revenues (NRR). The other is the
declining activity of customers with annual contract values exceeding $300,000.
In other words, the more critical issue appears to be the pressure from
macroeconomic factors, rather than the company’s achievements.
That’s
why many analytical firms have maintained their target prices at the same (or
approximately the same) level, despite the upbeat earnings. The consensus
forecast for DocuSign stock now predicts a 35% increase in
the next 12 months. But at the same time, these shares have been rated “Hold”.
Sometimes
(or even more frequently), forecasts can be controversial, as in this case. The
only way to make any decision is to conduct your own analysis and determine
whether there are compelling trading opportunities or not.