$DOCU Q3 2022 Earnings Report
$DOCU Short
Expectations for DocuSign’s earnings are so low this season after numerous failures at beating the estimates. Shares of the company have gone down 65% this year, making it the second worst performance in the Nasdaq 100 Index. As with other companies that went up during Covid 19, including Netflix, Zoom, and Peloton investors have revised their estimations as the economy is opening. Last quarter's results were so bad that the CEO left the company, so this will be the first earnings call with Mary Wilderotter as the chief executive. She was originally the former chair of the board. The COO also left following the last earnings call. Following this, investors expect management to offer a further lowering of guidance for the other half of the year as competition with Adobe over the latter's eSignature software and DocuSign's executive turnover situation are making things worse. Currently, 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. There are too many things that are unclear about their growth strategy, one of them being that they don’t even have a CEO yet. Looking at a company that has been down 70% within a year and down 82% since its all-time high, doesn’t have a CEO, and is nowhere near its goal, I find it very unlikely that anyone would want to invest in them. The stock is under a lot of pressure and has a lot of problems it has to fix first before being able to talk about its long-term goals. There is a chance that the company will introduce its new CEO this quarter however, people will have to see how his strategy is going to work first in the coming months before deciding to invest. With the price of around $60 per share, it is still considered highly overpriced by most analysts. This puts a value of around $11.5B on the company which doesn’t make any sense at all.
Market sentiment:
UBS Analyst Karl Keirstead, who has a neutral rating on DocuSign shares, recently performed a channel check and found that the overall tone was "cautious" as penetration is high, particularly among the Fortune 500, and there is sluggish growth surrounding its Contract Lifecycle Management products.
Keirstead believes that there is a "modest" downside risk to the guidance provided in July. However, the billings guidance for Q4 looks "too high" given the troubles the company is facing in sales execution, as well as executive turnover, with both the CEO and COO having left in June.
"These turnarounds take time, and it could take several quarters, even after a new CEO joins, before we start to see signs of a successful turnaround."
“DOCU was downgraded by RBC Capital Markets in August and by Piper Sandler in July. The analysts have tended to criticize management, but the simple reality is that expectations provided by management and supported by the analysts were too optimistic that growth rates from the last couple of years were somewhat sustainable. CEO Dan Springer resigned in June as a result of weakening growth and earnings that fell below expectations for FY Q1.”
"$DOCU after seeing P to C ratio 5:1 I’m out with an L. Seen this too many times, IV crush.”
“Part of me wonders if $DOCU doesn't announce a buyout at earnings call. Still no CEO right?”
“DOCU reports AFTER the bell ---------> TODAY The ---------> WORST performing stock in #Nasdaq 100 Been absolutely ----------> CRUSHED”
“DocuSign $DOCU Q2 Fiscal Year 2023 earnings after the close today Revenue estimate of $602m implying growth of 18% YoY Sales and Marketing expense increased significantly last quarter causing the net loss to widen. Interested to see if this trend has continued”
“$DOCU Too cheap too low to ignore for long”
“: $DOCU - DocuSign has lost over 83% of its value over the past 12 months. - The biggest hit occurred on December 3, 2021 after the release of their earnings. - Many of the company Directors and upper management were sellers of their stock in June 2022, including...”
“Also worth noting the CEO and COO have both resigned in the last 3 months”
Market Cap:11.42B P/E Ratio: N/A Initial reaction: Short Researched reaction: Short CEO: N/A Time: After close Estimate:-20%