DocuSign Ride On AI Wave For Better Outlook Guidance

Docusign is expected to report a 7.0% increase in revenue to $707.464 million from $661.39 million a year ago. Docusign's guidance on 07 March 2024, for the period ended 30 April, was for revenue between $704.00 million and $708.00 million.

The earnings per share was estimated to be 79 cents per share.

DocuSign has been growing earnings at an average annual rate of 40.2%, while the Software industry saw earnings growing at 15.3% annually. Revenues have been growing at an average rate of 26.6% per year. DocuSign's return on equity is 6.5%.

DocuSign Inc provides electronic signature solutions that enable businesses to digitally prepare, execute, and act on agreements. The platform helps users to automate and streamline their agreement processes, making transactions faster and more secure.

On 03 June 2024, DocuSign CEO sold 7,576 shares of the company. The transaction was reported in a recent SEC Filing. Following this sale, the insider now owns 91,970 shares of DocuSign Inc. Over the past year, Allan Thygesen has sold a total of 138,964 shares and has not made any purchases of the company's stock. This recent transaction is part of a broader trend observed within the company, where there have been 23 insider sells and no insider buys over the past year.

So should we be concerned about the sales of the stocks by their current CEO? I think we need to look at how the market look at DocuSign.

Shares of DocuSign Inc were trading at $53.54 yesterday (05 June 2024) giving the company a market cap of approximately $10.89 billion. The price-earnings ratio stands at 146.15, which is higher than the industry median of 26.425.

Something that need our attention is the high expenses that DocuSign spend on Sales and Marketing, they are able to gather a high revenue,but we can see from the chart below.

Their expenses on Sales and Marketing is more than $1 billion, yes we might argue that they need to do promotion and advertisements for their products, but I would think this could be reduced.

The money could be well spend on research and development to make the products more appealing.

If we were to look at how DocuSign have been trading, we could see that it has been trading downwards and investors sentiment does not seem to pick up.

This might give us an opportunity if we were to look at how DocuSign earnings growth have been performing, at the current price around $53.54, this looks like a considerable entry price.

I would be taking a small position before its earnings.

Based on how DocuSign have performed on its earnings, I believe there is a potential upside after its earnings, but I think market might be looking for better outlook guidance for the current quarter, as we have seen its competitors which have mixed results after their earnings.

Appreciate if you could share your thoughts in the comment section whether you think DocuSign would be able to provide a better-than-expected earnings and also better guidance for the current quarter.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.