DocuSign Not Recommended as Pre-Q3 Speculative Buy

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DOCUSIGN ($NASDAQ:DOCU): DocuSign is a cloud-based electronic document signature platform that has been gaining significant traction in the market over the last few years. It has been a popular stock to consider for those interested in pre-Q3 speculative buys, however, it is not recommended to make such a purchase prior to viewing the Q3 earnings report. An analysis of the company’s financials reveals a number of concerning trends that could have an impact on future earnings. Moreover, their expenses have steadily increased, with research and development costs rising significantly.

In addition, their customer base has also reduced due to the pandemic, making it all the more difficult for them to turn a profit in the current economic climate. This could lead to a further reduction in future earnings. As such, DocuSign is not recommended as a pre-Q3 speculative buy at this time. It could be worth revisiting once the Q3 earnings report is released and a more accurate picture of the company’s financial health can be formed.

Price History

On Wednesday, DOCUSIGN stock opened at $43.3 and closed at $43.6, up by 2.1% from the prior closing price of $42.7. Despite this increase in price, the stock is still trading at a lower price than it did at the beginning of the quarter. Sell-side analysts have indicated that the company has been experiencing lower than expected Q3 earnings, making it an unwise investment for speculators. As such, it is not recommended to purchase DOCUSIGN shares at this time. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Docusign. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Docusign. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Docusign. More…

Key Ratios Snapshot

Some of the financial key ratios for Docusign are shown below. More…

Analysis

At GoodWhale, we conducted an analysis of the wellbeing of DOCUSIGN and found that it was quite strong. Our Star Chart showed that DOCUSIGN had a strong growth rate, was profitable, and had a medium asset level, but a weak dividend. DOCUSIGN also scored highly in terms of cashflows and debt, with a health score of 8/10, demonstrating that it is capable of paying off debt and funding future operations. Based on our analysis, we concluded that DOCUSIGN was a ‘gorilla’ type company, which achieved stable and high revenue or earning growth due to its strong competitive advantage. This type of company may be attractive to investors looking for increased stability and long-term growth opportunities. More…

Peers

The company has a number of competitors, including Adobe Inc, Microsoft Corp, and Monday.Com Ltd.

– Adobe Inc ($NASDAQ:ADBE)

Adobe Inc. is an American multinational computer software company headquartered in San Jose, California. The company has a market cap of 153.82B as of 2022 and a ROE of 26.76%. Adobe Inc. develops, manufactures, and markets computer software products and services. The company’s products include Creative Cloud, Photoshop, Illustrator, InDesign, Premiere Pro, After Effects, and Dreamweaver. Creative Cloud is a subscription-based service that provides access to Adobe’s creative products. Photoshop is a raster graphics editor used for photo editing, graphic design, and web design. Illustrator is a vector graphics editor used for illustrations, logos, and branding. InDesign is a page layout and typesetting application used for print and digital publishing. Premiere Pro is a video editing software used for film, television, and online video. After Effects is a digital visual effects and motion graphics software used in film and television post-production. Dreamweaver is a web development application used for creating and editing websites.

– Microsoft Corp ($NASDAQ:MSFT)

Microsoft Corporation is an American multinational technology company with a market cap of $1.8 trillion and a ROE of 31.9%. The company develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and services. Its best known software products are the Microsoft Windows line of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers.

– Monday.Com Ltd ($NASDAQ:MNDY)

Monday.com Ltd is a publicly traded company with a market capitalization of 4.36 billion as of 2022. The company has a return on equity of -16.81%. Monday.com Ltd is a provider of enterprise software solutions. The company’s products are used by organizations to manage their businesses and processes. Monday.com Ltd’s products are used by a variety of industries, including healthcare, retail, manufacturing, and logistics. The company has a presence in a number of countries, including the United States, Canada, the United Kingdom, and Australia.

Summary

DOCUSIGN is a company that provides e-signature technology and has recently seen its stock price rise significantly. Investing analysis of DOCUSIGN suggests that the stock may be overvalued and may not be a good speculative buy before its Q3 earnings report. Analysts predict that DOCUSIGN’s stock price could take a hit if the company does not deliver strong Q3 results or misses investors’ expectations.

Furthermore, analysts have also raised concerns about DOCUSIGN’s competitive position against other e-signature companies. Despite its recent stock price growth, investors should exercise caution and wait to invest in DOCUSIGN until its Q3 earnings report is released.