DOCU Stock Pops as DocuSign Earnings Fall But Top Estimates Amid Lowered Expectations

DocuSign (DOCU) reported July-quarter earnings and revenue that topped estimates amid lowered expectations. The company’s outlook came in mixed, but DOCU stock surged on the news.

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The San Francisco-based software maker reported earnings after the market close on Thursday. DocuSign earnings for its fiscal second quarter came in at 44 cents a share, down 6% from a year earlier, but ahead of estimates for 42 cents.
In addition, the maker of electronic signature software said revenue rose 22% to $622.2 million. Analysts had predicted revenue of $602 million. A year earlier, DocuSign earnings were 47 cents a share on sales of $512 million.
Billings, a sales growth metric, rose 9% to $647.7 million vs. estimates of $601.8 million.
DOCU stock popped 10.5% to close at 64.04 on the stock market today.
DOCU Stock: More In-Person Meetings Hit Business
For the current quarter ending in October, DocuSign forecast revenue of $626 million at the midpoint of its outlook and billings of $589 million. Analysts had predicted third-quarter revenue of $625 million and billings of $593.4 million.
Demand for DocuSign products surged during the early part of the coronavirus outbreak, but many businesses are resuming in-person meetings. In addition to accommodating electronic signatures, the company’s software also automates the filing of contracts over the internet.
DocuSign has a search underway for a new chief executive. Board Chair Mary Wilderotter was named interim CEO on June 21.

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“We thought the quarter/guide were better-than-feared but we came away less confident in a timely turnaround to healthy growth and remain in wait-and-see mode until a new CEO,” said RBC Capital analyst Rishi Jaluria in a report. “DocuSign noted the company is close to naming a new CEO, suggesting M&A is off the table for now.”
Thus far in 2022, DOCU stock had retreated 63% heading into the earnings report. DocuSign holds a Relative Strength Rating of only 5 out of a best-possible 99, according to IBD Stock Checkup.
If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns for issues such as DOCU stock is one key to the investment guidelines.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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