SALE EXTENDED
MarketBeat All Access
Start your 30-day free trial,
then continue your subscription for 50% off.
TODAY ONLY!
Claim Your Discount
×
S&P 500   3,639.66 (-2.80%)
DOW   29,296.79 (-2.11%)
QQQ   269.10 (-3.81%)
AAPL   140.09 (-3.67%)
MSFT   234.24 (-5.09%)
META   133.45 (-4.04%)
GOOGL   98.68 (-2.70%)
AMZN   114.56 (-4.77%)
TSLA   223.07 (-6.32%)
NVDA   120.76 (-8.03%)
NIO   13.76 (-6.84%)
BABA   81.24 (-3.65%)
AMD   58.44 (-13.87%)
T   14.94 (-2.48%)
MU   52.91 (-3.13%)
CGC   2.79 (-25.60%)
F   12.20 (-1.29%)
GE   64.56 (-2.51%)
DIS   97.16 (-2.88%)
AMC   6.53 (-8.29%)
PYPL   90.17 (-4.50%)
PFE   42.32 (-1.79%)
NFLX   224.75 (-6.36%)
S&P 500   3,639.66 (-2.80%)
DOW   29,296.79 (-2.11%)
QQQ   269.10 (-3.81%)
AAPL   140.09 (-3.67%)
MSFT   234.24 (-5.09%)
META   133.45 (-4.04%)
GOOGL   98.68 (-2.70%)
AMZN   114.56 (-4.77%)
TSLA   223.07 (-6.32%)
NVDA   120.76 (-8.03%)
NIO   13.76 (-6.84%)
BABA   81.24 (-3.65%)
AMD   58.44 (-13.87%)
T   14.94 (-2.48%)
MU   52.91 (-3.13%)
CGC   2.79 (-25.60%)
F   12.20 (-1.29%)
GE   64.56 (-2.51%)
DIS   97.16 (-2.88%)
AMC   6.53 (-8.29%)
PYPL   90.17 (-4.50%)
PFE   42.32 (-1.79%)
NFLX   224.75 (-6.36%)
S&P 500   3,639.66 (-2.80%)
DOW   29,296.79 (-2.11%)
QQQ   269.10 (-3.81%)
AAPL   140.09 (-3.67%)
MSFT   234.24 (-5.09%)
META   133.45 (-4.04%)
GOOGL   98.68 (-2.70%)
AMZN   114.56 (-4.77%)
TSLA   223.07 (-6.32%)
NVDA   120.76 (-8.03%)
NIO   13.76 (-6.84%)
BABA   81.24 (-3.65%)
AMD   58.44 (-13.87%)
T   14.94 (-2.48%)
MU   52.91 (-3.13%)
CGC   2.79 (-25.60%)
F   12.20 (-1.29%)
GE   64.56 (-2.51%)
DIS   97.16 (-2.88%)
AMC   6.53 (-8.29%)
PYPL   90.17 (-4.50%)
PFE   42.32 (-1.79%)
NFLX   224.75 (-6.36%)
S&P 500   3,639.66 (-2.80%)
DOW   29,296.79 (-2.11%)
QQQ   269.10 (-3.81%)
AAPL   140.09 (-3.67%)
MSFT   234.24 (-5.09%)
META   133.45 (-4.04%)
GOOGL   98.68 (-2.70%)
AMZN   114.56 (-4.77%)
TSLA   223.07 (-6.32%)
NVDA   120.76 (-8.03%)
NIO   13.76 (-6.84%)
BABA   81.24 (-3.65%)
AMD   58.44 (-13.87%)
T   14.94 (-2.48%)
MU   52.91 (-3.13%)
CGC   2.79 (-25.60%)
F   12.20 (-1.29%)
GE   64.56 (-2.51%)
DIS   97.16 (-2.88%)
AMC   6.53 (-8.29%)
PYPL   90.17 (-4.50%)
PFE   42.32 (-1.79%)
NFLX   224.75 (-6.36%)

DocuSign Has Important Issues to Address When it Reports Earnings

DocuSign Has Important Issues to Address When it Reports Earnings

DocuSign (NASDAQ: DOCU) is continuing a long, painful decline that started almost exactly one year ago in September 2021. What a different time that was. DOCU stock was trading for over $300 and was being fueled by a pandemic tailwind.  

But in 2022 that tailwind has turned into a strong headwind. At issue is the question of what DocuSign can do for an encore? DocuSign has a big goal of achieving $5 billion in revenue. However, that would mean the company will have to generate more than twice the revenue it’s currently delivering.  

Perhaps the company's earnings report on September 8 will provide some clues. Investors will be looking for growing revenue to be sure. But they’ll also want to see the company return to profitability. Earnings per share turned negative in the last two quarters.  

I think Jea Yu was asking the right question in his article, “How Low Can DocuSign Go?” As painful as it might be for investors who jumped on DOCU stock in the middle of its rally, my fellow MarketBeat contributor was correct, it’s important for investors to pay attention to the floor right now. Here are some reasons to support that thought.  

Building More Use Cases 

DocuSign became a pandemic stock because it made all businesses adopt a digital model in weeks rather than years. DocuSign being the clear leader in the e-signature category benefited as businesses needed to conduct business online. But that also came with the question, what’s next?  

DocuSign’s answer to that question is the Agreement Cloud. As DocuSign says the Agreement Cloud gives a business “everything you need to connect and automate your entire agreement process.” By this the company means not just electronic signatures but creating entire “smart contracts” online including tracking of negotiations, agreements, amendments, and more.  


Of course, hearing the words “smart contract” makes me immediately think of blockchain and all the possibilities that continue to emerge there. However, with the cryptocurrency world having its own issues perhaps that’s a concern for another day.  

This isn’t to say that DocuSign isn’t growing. Revenue last quarter was up 25% year-over-year. While the rate of growth is slowing, as would be expected, the company has a base of customers that will allow it to continue to deliver stable revenue.  

But stable doesn’t get the company to its $5 billion goal. Nor will it do much to excite growth-minded investors.  

Can You Teach an Old Dog New Tricks? 

A cliché works because it points to a truth. And this truth was conveyed by analyst Jim Cramer. Agree with him or not, he made the point that DocuSign perhaps missed an opportunity to grow through acquisitions in related areas such as identity and cybersecurity. 

And that brings up a different question which continues to hang over the company. That is are they setting themselves up as an acquisition target? As Jea Yu wrote in the article I reference above, the abrupt departure of the company’s CEO in June gave that theory more legs. 

DOCU Stock Looks More Like a Trade More Than an Investment 

With a beta of over 1 (1.21) and short interest of over 8%, it looks like traders may have a good time with DOCU stock. It’s also a reason to stay away.  

I view DocuSign as a Hold for now. There are too many things that are unclear about their growth strategy, not the least of which is the naming of a new CEO. But I also believe there could be some value to buying shares if the stock were to fall below $50 per share. At that point, you could start legitimately wondering about the floor being too low rather than what the ceiling could potentially be.  

Should you invest $1,000 in DocuSign right now?

Before you consider DocuSign, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and DocuSign wasn't on the list.

While DocuSign currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
DocuSign (DOCU)
2.155 of 5 stars
$47.83-7.3%N/A-88.57Hold$62.38
Compare These Stocks  Add These Stocks to My Watchlist 

Chris Markoch

About Chris Markoch

Contributing Author: Retirement, Individual Investing

Chris Markoch is a freelance financial copywriter with over five years of experience covering various aspects of the financial markets. You may find his writing a little different than other stock articles you’ve read. And that’s OK with him. Chris doesn’t have a traditional finance background. What he does bring to the table is a strong business and marketing background having worked for agencies that serviced Fortune 500 companies. With that in mind, he isn’t overly impressed with what companies say, and more focused on what they do. And because buyer behavior dictates so much of what happens with a stock, Chris always keeps the end consumer close in mind. Chris has been writing for MarketBeat since 2018.

Contact Chris Markoch via email at CTMarkoch@msn.com.

MarketBeat Resources

Premium Research Tools

MarketBeat All Access members have access to premium reports, best-in-class portfolio monitoring tools, and our latest stock picks.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies, and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau MarketBeat is rated as Great on TrustPilot

© American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | contact@marketbeat.com | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Privacy Policy | Do Not Sell My Information | RSS Feeds

© 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart's disclaimer.