DocuSign Climbs as Analyst Calls Earnings 'Another Home-Run Quarter'

DocuSign is 'in a sweet spot to continue to receive significant customer spending,' one analyst says.
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DocuSign  (DOCU) - Get Report was climbing Friday after the e-signature solution company's earnings report was called "another home-run quarter"  by one analyst and sparked praise from several investment firms.

Shares of the San Francisco company were jumping 6.7% to $207.72 in premarket trading.

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DocuSign posted adjusted earnings of 44 cents a share, while revenue reached $469.1 million from $297 million. Wall Street had been calling for adjusted earnings of 28 cents a share on revenue of $437.6 million.

"Last night DOCU reported another home-run quarter handily beating Street estimates with Billings, FCF, and net dollar retention ratio all well above expectations as the CLM (contract lifecycle management) machine continues to flex its muscles," Wedbush analyst Dan Ives said in a research note. 

Given the eye-popping fundamental growth and cloud driven shift, the analyst added that "we believe the DOCU story in still in the early innings of playing out as evidenced by our recent checks and last night's results."

Ives, who maintained his outperform rating on the stock, said he believes the company "is in a sweet spot to continue to receive significant customer spending given its unique solution with an e-signature shift that has likely permanently changed among enterprises moving forward (and is not just a work-from-home pull forward)."

The analyst lowered his price target to $260 from $300  "reflecting a lower multiple in this backdrop."

I See DocuSign as Tradeable With the Potential for Investment

Oppenheimer analyst Brian Schwartz cut his price target on DocuSign to $260 from $300, while keeping an outperform rating, according to the Fly

The company reported "very solid" fiscal first-quarter results but the guidance implies growth deceleration ahead as it begins lapping the 2020 Covid-19 benefits, Schwartz said.

Citigroup analysts raised their price target for DocuSign to $288 from $282, while Morgan Stanley raised its price target to $295 from $290.