Analysts Laud DocuSign For Uninterrupted Business Operations, Tout Product As 'Mission Critical'

DocuSign Inc DOCU reported Q2 revenue of $511.8 million, beating the analyst consensus of $487.5 million. The EPS of $0.47 beat the consensus of $0.40. It sees Q3 revenue between $526 million - $532 million above the consensus of $520.6 million.

Analyst Reaction: Analysts raised their price targets on subscription and billing growth prospects. Needham analyst Scott Berg raised the PT to $340 from $275, implying a 15.4% upside, and reiterated a Buy on "strong" Q2 with a "typical" upside to revenue and profitability. 

Berg notes that DocuSign's sales metrics and growth decelerated sequentially, albeit at a slower rate than the Street consensus. He considers the outlook as conservative.

RBC Capital analyst Rishi Jaluria raised the PT to $345 from $280, signifying a 17.1% upside, and maintained an Outperform. The results reflect the sustainability of the company's tailwinds post-pandemic on solid billings, net revenue retention, and impressive traction with CLM and Notary.

Baird analyst William Power raised the PT to $330 from $320, indicating a 12% upside, and affirmed an Outperform.

UBS analyst Karl Keirstead raised the PT to $350 from $340, implying an 18.8% upside, and reiterated a Buy. The results reflected a "long tail" of sustainable growth, with subscription revenue growth and billings growth beating estimates.

JMP Securities analyst Patrick Walravens raised the PT to $320 from $310, signifying an 8.6% upside, and maintained an Outperform. Walravens considers it a clear leader in electronic signature and the broader system of agreement and sees lots of room for growth as DocuSign targets a $50 billion total addressable market.

Citi analyst Tyler Radke raised the PT to $389 from $386, indicating a 32.1% upside, and affirmed a Buy.

Oppenheimer analyst Brian Schwartz raised the PT to $310 from $260, implying a 5.2% upside, and reiterated an Outperform. The results reflect DocuSign as "mission-critical to keep business operations flowing during disruptions and as employees return to work."

Price Action: DOCU shares traded higher by 6.32% at $313.18 on the last check Friday.

Image by mohamed Hassan from Pixabay