Why $DOCU Went Up

Turnaround Essay

DocuSign went up 17% after reporting quarterly results that beat analysts’ estimates and raised its billings forecast, showing that the business remains strong even as more workers return to offices. Second quarter revenue increased 22% to $622.2 million, while the expectation was $602.7 million. EPS was 44 cents a share, compared with the average estimate of 42 cents. Expectations for the company were low before the earnings were released, as sales growth slowed, Chief Executive Officer Dan Springer also left in June and the shares have gone down 62% this year. However, DocuSign changed its forecast for the full year to $2.57 billion from $2.54 billion. I thought it would go down after seeing how sensitive the stock market has become to the smallest things. The company hasn’t had a CEO for the past 3 months and even back then, they were losing customers every day as more people went back to their offices. Considering how the company was left without management and how it's also summer time which means a lot of people are off from work, I thought it would definitely be another bad quarter for DocuSign. What I learned from this and the other companies, in general, is that no matter how bad the current results are or how bad they miss the estimates, if they decide lower or higher their forecast for the rest of the year, there will always be a reaction based on that and the current quarter results will become worthless. Going forward, one of the main things I will be considering is the future of the company rather than what they have done in the past because that will be the most important thing in most reports.