Market Overview

DocuSign's COVID-19 Quarantine Benefits Could Last Longer, But Not Enough To Move BofA From Sidelines

Share:

DocuSign Inc (NASDAQ: DOCU) delivered upbeat first-quarter results, with strength across the board, driven by shelter-in-place orders boosting customer adoption of its e-signature solutions, according to BofA Securities.

The DocuSign Analyst

Kash Rangan maintained a Neutral rating for DocuSign, raising the price target from $80 to $165.

The DocuSign Thesis

DocuSign reported revenue growth of 39% and billings growth of 59%, markedly higher than BofA’s estimates of 30% and 24% respectively, Rangan said in the note.

He added that the quarter was driven by accelerated adoption of the company’s e-signature offering from a broad range of industries as well as a high dollar net retention rate of 119%.

DocuSign exhibited strong execution in the quarter, with net new customer additions growing by a whopping 72,000 to 661,000. The analyst mentioned the company addresses a relatively nascent market and faces competitive risks.

Management raised the total revenue and billings guidance for fiscal 2021 from $1.27 billion to $1.32 billion and from $1.44 billion to $1.53 billion, respectively, at the mid-point, as heightened demand for e-signature is expected to continue.

“We recognize COVID benefits, but remain cautious on lower margin potential vs best in class SaaS companies,” Rangan wrote.

DOCU Price Action

Shares of DocuSign fell about 1.56% to $137.88 at the time of publication Friday.

Latest Ratings for DOCU

DateFirmActionFromTo
Jun 2020OppenheimerInitiates Coverage OnOutperform
Jun 2020Morgan StanleyMaintainsEqual-Weight
Jun 2020Wells FargoInitiates Coverage OnEqual-Weight

View More Analyst Ratings for DOCU
View the Latest Analyst Ratings

 

Related Articles (DOCU)

View Comments and Join the Discussion!

Posted-In: BofA Securities Kash RanganAnalyst Color Earnings News Price Target Analyst Ratings

Latest Ratings

StockFirmActionPT
SOLOAegis CapitalAssumes4.0
TSLAJP MorganMaintains295.0
CVNAWedbushMaintains125.0
PFSICredit SuisseMaintains46.0
PMTCredit SuisseMaintains22.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com