Why DocuSign Stock May Fall Despite High Earnings
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Shares of DocuSign traded lower after the digital signature software company posted better-than-expected results.
DocuSign
(ticker: DOCU) announced fiscal fourth-quarter adjusted earnings per share of 65 cents, above the consensus estimate of 52 cents, according to FactSet. Revenue came in at $659.6 million, better than expectations of $641 million.
The guide was also in line with expectations. For the first fiscal quarter, DocuSign expects revenue of $639 million to $643 million, compared with a consensus of $640 million.
“We ended a strong year, hitting key financial metrics and making tangible progress on our strategic priorities. We are reshaping DocuSign to invest in our innovation roadmap and self-service capabilities,” said CEO Allan Thygesen.
Shares of the software company fell as much as 8% in after-hours trading following its release. Investors may have had higher expectations after the stock rallied 16% this year.
DocuSign also announced that CFO Cynthia Gaylor will step down at the end of the year. Late last year, the company named Allan Thygesen, a former
Alphabet
executive, as its new CEO.
In a phone interview with Barron’s after the call, Thygesen said he was “very optimistic” about the potential of the latest advances in generalized AI for DocuSign and that the company is investing heavily in the technology. He also noted DocuSign actively uses AI in their current product offering. On the overall economy, the executive said the macro environment is almost the same as it was three months ago.
Last month, DocuSign announced 10% staff cuts following 9% layoffs in September. The digital signature market boomed during the pandemic with more people working remotely and from home. But as offices reopened, the company’s growth slowed.
Write to Tae Kim at [email protected]