DocuSign Growth Potential Prompts Share Price Target Boosts

DocuSign's growth potential and other factors prompted two analysts to raise their price targets on the e-signature tech provider.
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DocuSign  (DOCU) - Get Report shares on Thursday rose after analysts at J.P. Morgan and Wedbush Securities raised their share-price targets on the e-signature darling.

“We continue to believe DocuSign represents an attractive opportunity for long-term capital appreciation for several reasons,” J.P. Morgan analyst Patrick Walravens wrote in a commentary.

Those reasons:

· “The core eSignature business remains an underpenetrated, high-growth business opportunity, where DocuSign has a dominant competitive position;

· The covid-19 crisis seems to be accelerating;

· The adoption of DocuSign’s digital system of agreement;

· We like the responsible balance of growth and profitability under the leadership of [Chief Executive] Dan Springer;

· We believe there are major opportunities for DocuSign in federal, mortgages, and perhaps most interestingly, notary services.”

Walravens lifted his share-price target to $233 from $150, affirming his outperform rating.

As for Wedbush, analyst Daniel Ives increased his share-price target to $240 from $165 and affirmed his outperform rating too.

“We continue to believe DOCU's deal flow is holding up well, stronger than expected in this covid-19 pandemic environment, which bodes well for strong underlying metrics/headline numbers during the fiscal second quarter (July),” he wrote in a commentary.

That should happen, “as momentum is continuing given its sweet spot solution set,” Ives said.

“While this macro is causing deal slippages across the board in the software landscape, we are seeing the DOCU solution set and e-signature platform continue to be prioritized by IT decision makers, as it serves a clear key need for remote workers at home during this semi-lockdown.”

DocuSign recently traded at $209.64, up 1.6%. The stock had well more than doubled in the three months through Wednesday.