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.
