DocuSign (NASDAQ:DOCU)
Shares of DocuSign (NASDAQ:DOCU) surged on Tuesday despite criticism from investment firm UBS, which noted a “right-sizing” in renewals and more competition from Adobe (NASDAQ:ADBE).
DocuSign (DOCU) analyst Karl Keirstead recently conducted a channel check and found that the overall tone was “conservative” due to high penetration, notably among the Fortune 500, and slow growth surrounding its Contract Lifecycle Management products.
Even while one partner claimed that this process might be bottoming out (we are not convinced), anecdotes regarding “right-sizing” DocuSign contracts upon renewal and an increase in the amount of anecdotes about share losses to Adobe sounded “fresh,” according to Keirstead in a note to customers.
In premarket trading, shares of DocuSign (DOCU) increased by more than 0.5% to $58.43.
Looking ahead, Keristead thinks that the guidance DocuSign (DOCU) gave in July is subject to “moderate” downside risk. The company’s difficulties with sales execution as well as the significant managerial turnover—both the CEO and COO left in June—make the fourth-quarter billings guidance appear “too high.”
DocuSign (DOCU), along with a number of other businesses, will be among the most impacted software companies in a potential recession, according to investment company RBC earlier this month.
Future prospects
During the early stages of the pandemic, DocuSign shares soared as demand for electronic signature technology grew due to lockdowns and remote work. The growth spike of that time has since given way to more scientific outcomes. Revenues rose by 25% year over year in the company’s first quarter of fiscal 2023, but adjusted diluted earnings per share fell by 14% to $0.38.
It’s critical to keep in mind that DocuSign, which holds an estimated 70% market share, is the unchallenged leader in electronic signatures. By providing the Agreement Cloud, its contract lifecycle management system, the company is also deepening its connections with clients and raising its total addressable market to almost $50 billion.
Although its growth has halted, the opportunities are enormous. DocuSign stock is still a buy for investors with a suitable time frame.
Featured Image : Megapixl © Mohammedsoliman4
Author Jowi Kwasu 
