Is It Time To Buy DocuSign Stock Following Q3 Results? Stephanie Link Weighs In

Is It Time To Buy DocuSign Stock Following Q3 Results? Stephanie Link Weighs In

DocuSign Inc DOCU shares are diving Friday morning after the company reported fiscal third-quarter 2022 earnings and issued weak guidance.

Despite being about 50% off of its 52-week highs, the valuation is still stretched, according to Hightower Advisors' Stephanie Link.

"This one's a hard one to own here at 124 times earnings and even 23 times price-to-sales," Link said Friday on CNBC's "Squawk Box."

The stock moves based on billings numbers, Link noted. Billings came in $565.2 million, representing an increase of 28% year-over-year, but the growth was down from previous quarters. 

"After six quarters of accelerated growth, we saw customers return to more normalized buying patterns, resulting in 28% year-over-year billings growth," said Dan Springer, CEO of DocuSign.

See Also: Why DocuSign Shares Are Trading Lower Premarket?

Billings expectations were for $595 million, Link said, adding that DocuSign also guided lower for fourth-quarter billings, expecting growth of 21% to 23%.

"This is a company that was seeing 40%, 50%, 60% growth in billings," she said.

Link told CNBC that beyond tough comparisons and slowing growth, DocuSign also said it had execution problems during the quarter.

"I think it takes a while to fix execution," she said. "I like to look at things that fall pretty substantially, but I just can't get my arms around valuation."

DOCU Price Action: DocuSign has traded as high as $314.76 and as low as $179.49 over a 52-week period.

The stock was down 32.90% at $156.97 Friday morning.

Photo: courtesy of DocuSign.

Posted In: CNBCDan SpringerStephanie LinkEarningsNewsGuidanceShort IdeasMediaTrading Ideas