DocuSign shares set to plunge 30% after the company gave weak guidance

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  • Shares of e-signature software maker DocuSign fell over 30 per cent in premarket trading on Friday.
  • The company on Thursday reported guidance for the fourth quarter that fell short of analyst estimates.
  • Still, DocuSign beat analysts’ expectations for the third quarter.

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Shares of e-signature software maker DocuSign were down more than 30% in premarket trading on Friday after the company reported guidance for the fourth quarter, which fell short of analyst estimates.

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DocuSign Predicted According to Refinitiv, fourth-quarter revenue would be between $557 million and $563 million, while analysts averaged $573.8 million in revenue for the quarter.

Still, according to Refinitiv, DocuSign beat analysts’ expectations for the third quarter, reporting earnings per share of 58 cents, adjusted, 46 cents compared to analysts’ expectations, and $545.5 million in revenue versus $531 million expected. Is.

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Several firms, including JPMorgan, Piper Sandler, UBS and Wedbush, lowered their ratings on the stock following the earnings report. While Citi analyst Tyler Radke maintained a buy rating, he lowered his price target from $389 per share to $231, calling the report “one of the biggest.” [software as a service] Whispers in recent memory.”

“The pandemic tailwind for DocuSign came much faster than the expected halving, gripping the company,” JPMorgan analyst Sterling Auty wrote in a note to clients.

The company has seen rapid growth, benefiting from the rise of remote working during the pandemic. DocuSign reported its sixth straight period of revenue growth of more than 40%, but said that growth is forecast to come in at around 30% next quarter.

CEO Dan Springer acknowledged that the figure would be disappointing after such extraordinary growth at the start of the year.

“While we expected a final step down from the peak level of growth achieved during the height of the pandemic, the environment shifted much faster than we anticipated,” Springer said on the earnings call.

The company also said that its international president, who was previously the CFO, left the company on November 30.

-Businesshala’s Ari Levy

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