DocuSign stock, an electronic signature technology business, witnessed further anxiety on Wall Street on Monday due to a statement made by an analyst with Morgan Stanley named Josh Baer. Baer advised investors to “read the small print” before supporting DocuSign (NASDAQ:DOCU).
Baer lowered his recommendation on DocuSign stock from equal-weight, which indicates a hold, to underweight, which indicates a sell. He also reduced his price objective on the DocuSign stock from $73 to $47 per share. Baer presented a long list of problems that DocuSign stock is now experiencing, some of which include the aftereffects of a Covid-related business surge, changes in senior leadership, and difficulties within the company’s salesforce staff.
“We anticipate continuing execution challenges,” which result from several issues that DocuSign (NASDAQ:DOCU) and its newly chosen Chief Executive, Allan Thygesen, who begins his new role on October 10, are now dealing with. “We expect [to see] further execution issues,” DocuSign (NASDAQ:DOCU) has had a tumultuous summer, which culminated in the resignation of its previous CEO, Dan Springer, in June. Springer’s departure came in the wake of a dissatisfying quarterly earnings report and forecast. Thygesen is now joining the company.
DocuSign stock dropped by 2% in early trade after Baer lowered their rating on the company.
As a part of the procedure he lowered his rating, Baer said that all of DocuSign (NASDAQ:DOCU) problems are being “exacerbated by the adverse macro [business] environment.” He anticipates that the company’s billings will increase by just 3% from 2021 to this year.
According to Baer, moving forward, even as DocuSign stock works its way through its near-term challenges, factors such as intensified competition and commoditization of the company’s services should put pressure on the business’s pricing structure and limit revenue growth in the coming years.
DocuSign stock said a week ago that it would reduce its personnel by around 9% and record costs ranging from $30 million to $40 million due to the job cutbacks.
DocuSign stock experiences a decline as Morgan Stanley downgrades the company because of the “small print.”
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