DocuSign shares plunge 24% on profit miss and downgrades


In this article

The Docusign Inc. website on a laptop computer arranged in Dobbs Ferry, New York, U.S., on Thursday, April 1, 2021.
Tiffany Hagler-Geard | Bloomberg | Getty Images

Shares of DocuSign plunged as much as 21% on Friday after the e-signature software maker posted fiscal first-quarter earnings that fell short of analysts’ estimates.

DocuSign on Thursday reported adjusted earnings per share of 38 cents, missing Wall Street’s projected 46 cents per share. The earnings miss overshadowed DocuSign’s outperforming revenue for the quarter, which came in at $588.7 million, compared to consensus estimates of $581.8 million.

DocuSign’s business got a major lift in the early months of the coronavirus pandemic with the increase in online transactions, but it has been slowing in recent quarters as it faces tough comparisons to exceptional growth in 2020 and early 2021. Additionally, the company said Thursday it has experienced challenges due to the deteriorating macroeconomic environment, particularly the war in Ukraine.

Several firms, including Evercore ISI, Bank of America and William Blair downgraded the stock following the earnings report. William Blair’s Jake Roberge downgraded DocuSign to market perform, citing the company’s weaker-than-expected billings guidance for fiscal 2023.

DocuSign projected 7% to 8% year-over-year billings growth for the year, “well short of DocuSign’s prior guidance midpoint that called for 15% growth,” Roberge said.

“While customers are not churning off the platform, DocuSign is seeing many customers decrease platform consumption from pandemic peaks as their contracts come up for renewal,” Roberge said, adding that the company plans to scale back hiring targets for the year in order to focus on profitability.

“Given management’s limited visibility, a sales restructuring that will take several quarters to complete, and a lack of near-term catalysts, we believe DocuSign’s stock will remain range-bound over the next few quarters,” he added.

— CNBC’s Jordan Novet contributed to this article.

WATCH: DocuSign is a business that will be impaired in the long term, says Trivariate’s Adam Parker

Products You May Like

Articles You May Like

Quick Charge Podcast: June 23, 2022
Unhealthy? Putin was playing hockey at the weekend, says Kremlin
Quick Charge Podcast: June 20, 2022
US Senate passes rare bipartisan gun control legislation
‘I can’t take the cost of living anymore’: We asked Britons how the crisis is affecting them

Leave a Reply

Your email address will not be published.