DocuSign stock crawling back: Is $DOCU a good investment?
Shares of the e-signature software maker DocuSign (NASDAQ: DOCU) are in the midst of a recovery after a major sell-off. After peaking above $300 per share in 2021, the stock fell more than 80% and hit a fresh all-time low of $38 last November. However, the stock has crawled back in the past few weeks and $DOCU became hot again after the earnings announcement. As of this writing, the stock trades above $59.
DocuSign is the most reliable and globally trusted electronic signature software on the market, used by more than 200 million users worldwide. The company uses e-signature technology that allows you to sign your documents quickly and seamlessly online, eliminating the need for physical meetings or exchanges. Users can easily upload documents, add signature fields, and send them for signing with just a few clicks. It is such a professional option with many integrations such as Salesforce, Windows, Apple, and Workplace from Facebook.
DocuSign’s Q4 results demonstrate a strong yearly outlook
Last week, DocuSign impressed investors and analysts with strong Q4 earnings results. The company reported quarterly earnings of 76 cents per share, which beat analyst estimates of 64 cents per share. DocuSign’s fourth-quarter revenue increased 8% year-over-year to $712.4 million, which beat the consensus estimate of $699.18 million. The DocuSign stock price popped by more than 10% on Thursday’s extended trading as investors reacted to the strong quarterly earnings.
The company also issued better-than-expected current-quarter and full-year sales outlooks. For the current quarter ending in April, DocuSign said it expects revenue to be in the range of $704 million to $708 million. The company expects full-year revenue to be in the range of $2.92 billion to $2.93 billion.
“DocuSign ended fiscal 2024 with momentum in product innovation, customer growth and financial performance, including more than doubling free cash flow year-over-year,” DocuSign CEO, Allan Thygesen said.
$DOCU: medium-term forecast
On the daily chart, we see that the stock found a strong support at $38, where it formed a double-bottom pattern. Therefore, the stock can push further up continuing the uptrend with the first potential target being $70 followed by $92/95 in the medium term. A further recovery allows for a push toward $112 and $130 serving as additional upside targets if the stock successfully settles above $100. However, the bullish forecast will be invalidated if the price breakdown is below the $38 level, which is the bottom of the current trading range.
Is $DOCU a good investment?
The bottom line is that the company seems like a good investment because DocuSign is by far the most dominant company in the e-signature market. We also expect the digital signature market is expected to grow substantially over the next decade as organizations around the world undergo digital transformation, and e-signature adoption continues to rise.
