DocuSign Gains on Better-than-Expected Q1 Results

DocuSign (DOCU) reported solid profits and revenues in the fiscal first quarter. DocuSign allows organizations to manage electronic agreements.

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Following the announcement, shares of the company surged 5.8% in Thursday’s extended trading session after closing 2.9% lower on the day.

The company reported earnings of $0.44 per share, which surged 266.7% compared to the prior-year quarter and beat analysts’ expectations of $0.28 per share.

Total revenue came in at $469.1 million, which was above the Street’s estimates of $436.13 million, and jumped 58% from the year-ago period.

Subscription revenue increased 61% year-over-year, while Professional services and other revenue was up 7%.

DocuSign CEO Dan Springer said, “We’ve increasingly become the way people agree in this emerging anywhere economy—and that’s not only helping organizations continue operations during the pandemic, but helping them realize new and more efficient ways of doing business in the future.” (See DocuSign stock analysis on TipRanks)

For fiscal Q2, DocuSign expects revenue in the range of $479 – 485 million, compared to analysts’ expectations of $473.68 million.

For Fiscal 2022, revenue is expected in the band of $2.027 – 2.039 billion, versus the consensus estimate of $1.98 billion.

Following the fiscal first-quarter results, Oppenheimer analyst Brian Schwartz decreased the stock’s price target to $260 from $300 for 33.5% upside potential and reiterated a Buy rating.

Schwartz commented, “We believe the F1Q results are a salient proof point that not only is DocuSign being viewed as mission critical to keep business operations flowing during the pandemic and as employees return to work; but more importantly, as a strategic technology for the new digital future of work.”

Consensus among analysts is a Strong Buy based on 12 Buys versus 1 Hold. The average analyst price target stands at $263.92 and implies upside potential of 35.5% to current levels. Shares have gained 39.1% over the past year.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on DocuSign, with 0.9% of investors increasing their exposure to DOCU stock over the past 30 days.