Zinger Key Points
- DocuSign's shares drop over 7% premarket; BofA Securities analyst cuts price target to $60.
- Despite solid revenue growth and optimistic outlook, margins contract; company plans a $1 billion stock repurchase program.
DocuSign, Inc. DOCU shares are trading lower in the premarket session on Friday.
BofA Securities analyst Brad Sills maintains DocuSign with a Neutral and lowers the price target from $72 to $60.
Also, Baird analyst William Power maintains the Neutral and lowers the price target from $65 to $55. Needham analyst Scott Berg reiterates DocuSign with a Hold.
The company reported first-quarter results yesterday. Margins contracted to 78.9% from 79.4% in the year-ago despite a solid 5% growth in billings.
Check This Out: DocuSign Q1 Earnings: Revenue Beat, EPS Beat, $1B Buyback Increase And More
DocuSign exited the quarter with cash and equivalents worth $1.2 billion.
CEO Allan Thygesen said in an interview with Barron’s that DocuSign has reached “an inflection point moment,” and will return to double-digit revenue growth.
The company experienced a surge in business during the pandemic when many offices closed but saw a slowdown as the world returned to a more typical working environment, Barron’s added.
DocuSign’s board authorized a $1 billion increase to its existing stock repurchase program.
DocuSign expects second-quarter revenue to be in the range of $725 million to $729 million versus estimates of $726.3 million. The company sees second-quarter billings in the range of $715 million to $725 million.
DocuSign currently expects fiscal year 2025 revenue of $2.92 billion to $2.932 billion (prior view $2.915 billion to $2.927 billion) versus estimates of $2.926 billion.
According to Benzinga Pro, DOCU stock has lost over 4.5% in the past year. Investors can gain exposure to the stock via Pacer US Cash Cows 100 ETF COWZ and Direxion Work From Home ETF WFH.
Price Action: DOCU shares are trading lower by 7.49% to $50.51 at last check Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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