DocuSign 3Q Sales Soar 53%; Street Sees 12% Upside

DocuSign reported strong 3Q results on Thursday wherein its revenues jumped 53% year-over-year to $382.9 million as customers used electronic documents and signatures to close contracts amid the COVID-19 pandemic. The electronic signature company’s 3Q revenues surpassed the Street estimates of $361.2 million as well. Shares closed 3% higher in extended trading.

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DocuSign’s (DOCU) 3Q adjusted earnings doubled to $0.22 per share, from $0.11 reported in the year-ago quarter, and beat analysts’ expectations of $0.13.

“As companies accelerate the digital transformation of their business and agreement processes, DocuSign’s role as an essential cloud platform continues to grow,” said Dan Springer, DocuSign CEO. “Our Q3 results reflect that tailwind, as well as the immediate and long-term value that customers see from eSignature and our broader Agreement Cloud.” (See DOCU stock analysis on TipRanks)

Buoyed by a strong quarterly performance, DocuSign raised its fiscal 2021 revenue guidance range to $1.426-$1.430 billion, from $1.384-$1.388 billion. For 4Q, the company projects revenues of between $404 million-$408 million.

On Nov. 30, Robert W. Baird analyst William Power reiterated a Buy rating and the price target of $280 (21.2% upside potential), saying that he expects another strong quarterly result from DocuSign. Power believes that the company should benefit from the ongoing digital transformation and strong demand for WFA (Work Force Administrator) tools.

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 10 Buys and 6 Holds. The average price target stands at $257.69 and implies upside potential of about 11.6% to current levels. Shares have gained 211.7% year-to-date.