Why This Analyst Is Bullish On Tech, But Bearish On DocuSign

DocuSign Inc DOCU is among the “have nots” in the tech sector and may continue to see its multiplies compress “as results soften off pandemic highs,” according to Wedbush.

The DocuSign Analyst: Daniel Ives downgraded the rating for DocuSign from Neutral to Underperform, while reducing the price target from $80 to $60.

The DocuSign Thesis: Although DocuSign benefited significantly from the adoption of the work-from-home model by most companies during the pandemic, the company will see “darker days ahead” as it expands into larger (contract lifecycle management) deals, Ives said in the downgrade note.

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DocuSign is up against “a much more difficult selling environment as the company expands into broader CLM deals with e-signature going through a major growth transition in the field,” he added.

The analyst mentioned that DocuSign’s hypergrowth story may be “essentially over” and the company “could see difficult growth ahead not factored into shares at current prices in our opinion.”

DOCU Price Action: Shares of DocuSign had declined by 2.20% to $83.94 at the time of publication Tuesday.