DocuSign Share Forecast January 2022 – Time to Buy DOCU?
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DocuSign Shares (NASDAQ: DOCU) are in the red today, after closing at $127.31 as of January 18th (19:59 EST). DocuSign experienced high growth during the lockdowns. Additionally, the company’s CEO Dan Springer bought shares recently, which investors have taken as a buying signal.
DocuSign – Technical Analysis
The financial statement from DocuSign indicated a market cap of $25.192 billion with total assets worth $2.411 billion. Revenue for 2020 was at $1.45 billion with a profit margin of -16.74% compared to $973.97 million in 2019.
Moving averages such as Exponential Moving Average (10)(137.49), Simple Moving Average (10)(138.36), Exponential Moving Average (20)(146.83), Simple Moving Average (20)(146.13) and Exponential Moving Average (30)(158.01) are indicating a sell action. On the other hand, oscillators such as Relative Strength Index (14)(28.50), Stochastic %K (14, 3, 3)(9.70), Commodity Channel Index (20)(−145.85), Average Directional Index (14)(35.73) and Awesome Oscillator(−19.24) are neutral.
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Recent Developments
DocuSign deals with providing technology solutions for securing and signing documents. Founded in 2003 by Court Lorenzini, Tom Gonser and Eric Ranft, the company announced plans for an initial public offering on the NASDAQ in 2018.
The company also acquired Spring CM for an estimated $220 million the same year.
The company announced the DocuSign Agreement Cloud, a suite of products and integrations for automating and connecting the entire agreement process digitally, marking the company’s transition from its former position in digital transaction management.
They acquired Seal Software in February 2020, in a deal reported to be almost $188 million.
The company’s growth was accelerated during the lockdown, which closed offices and forced people to work from home. The company’s revenue growth slowed since peaking in 2021 but is still 2% year over year in the fiscal 2022 third quarter to $545 million.
Analysts expect DocuSign’s growth to slow further in fiscal 2023 to 25%.
DocuSign is aiming at establishing a new venture to reduce its reliance on e-signature software-subscription renewals. Its newest DocuSign Ventures provides a platform for entrepreneurs and startups. This can help the company transform into a venture capitalist/angel investor.
While it is a risky avenue, DocuSign is diversifying to prepare for a time when its core services are less relevant.
In a recent Press Release, DocuSign gave out clues as to what types of businesses might be the target for DocuSign ventures.
These include legal and compliance automation technologies, artificial intelligence and smart contract technology, compliance automation technologies, artificial intelligence and smart contract technology, digital payment platforms and others. Each of these areas will be integrated with DocuSign’s existing products.
Should You Buy DOCU Shares?
DocuSign needs revenue growth which means that it needs to diversify further. The company is already the leader in the e-signature market holding an estimated 60% market share over competitors like Xink and Adobe.
Analysts expect the e-signature market to grow to $6.9 billion in 2025, averaging 27% growth per year. Investors can expect to see DocuSign’s revenue matching this industry growth if it can maintain its market share.
DocuSign is hoping to break into digital agreement signing and management, a $50 billion potential market, according to management. These cross-selling opportunities make lots of sense for DocuSign.
Whether DocuSign is the company for investors depending on their risk tolerance, investing goals and time horizon. Right now investors should rather lookout for more positive news coming out of the company before they invest in it.
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