DocuSign software automates the filing of contracts and certifies electronic signatures. The company’s stock holds an IBD Relative Strength Rating of 94 out of a best-possible 99.
On December 3, DocuSign chief executive said that the company’s stock is more than a work-from-home name. The company makes technology that facilitates digital contracts and it has exceeded expectations once more. DocuSign Inc (NASDAQ: DOCU) stock gained in extended trading Thursday as revenue and earnings for the October quarter surpassed Wall Street targets.
During the COVID-19 pandemic, the company said that it continued to attract more clients, who shifted to electronic signatures to close contracts. Dan Springer, the CEO, told reporters that he expects the upward trend to continue.
DocuSign added 73,000 users in the October quarter. That number is down from 88,000 in the second quarter and almost the same as 72,000 in the first quarter. Checking the DocuSign earnings report, the software stock has consolidated. DOCU has formed a double-bottom base with a buy point of 246.90.
Springer believes that the strong momentum witnessed in 2020 will remain in the long-term; as users discover that the process of creating contracts electronically provides many benefits with regards to cost and efficiency.
DocuSign software automates the filing of contracts and certifies electronic signatures. The company’s stock holds an IBD Relative Strength Rating of 94 out of a best-possible 99.
DocuSign Services
Apart from electronic signatures, DocuSign offers many services for contract management. Some of the products and services on offer include those that enable businesses to analyze trends across volumes of the previous agreements.
Springer acknowledged that this segment of the business experienced growth earlier in 2020. However, some firms put these types of projects on hold since they feared taking on huge projects amid the pandemic. Now, this business segment is rebounding as companies adjust to the current reality.
The CEO also commented that the firm is combating the use of paper, not other e-signature providers. He thinks that the current market is barely 10% penetrated.
Back in July, DocuSign purchased Liveoak aiming to enhance its notary offerings, with many states now acknowledging remote notary services. For now, the company is targeting first-party notary services for enterprises like banks that have their local notaries that they use whenever their clients are signing agreements.
The company also sees potential opportunities with third-party notary services including the mom-and-pop shops although these may take longer to implement. Waves of the pandemic are worsening the conditions in the business world. Thus, it might push even the strict jurisdictions to reconsider their policies to allow remote notary work given their safety advantages. Springer stated:
“I think in the very near future there will be near-ubiquitous coverage across the country.”
Revenue Reports that Affects DocuSign Stock
Data indicates that DocuSign’s revenue for the fiscal third quarter rose from $250 million to $382.9 million. Concurrently, FactSet analysts expected revenue of $361 million. Billings for the same period surged from $269.4 million to $440.4 million while the FactSet consensus was for about $386.6 million.
DocuSign recorded a fiscal third-quarter net loss of $58.5 million, or 31 cents per share, compared to a loss of 26 cents a share, or $46.6 million, in the 2019 third-quarter. DocuSign earned 22 cents a share on an adjusted basis, up from 11 cents a share a year before. That earning was significantly higher than the FactSet consensus of 13 cents per share.
DocuSign projects revenue of between $404 million and $408 million for the January quarter while analysts call for $387 million. The firm also expects billings of around $512 million to $522 million ahead of the FactSet consensus of $503.9 million.
DocuSign shares have risen by over 200% so far in 2020 as the S&P 500 has gained 13%. The shares gained about 3% in after-hours trading on December 3.
Wanguba Muriuki is a content crafter passionate about putting everything into writing. He is passionate about Blockchain and Traveling. He is also an experienced creative and technical writer. Everything and everyone has a story to tell. What better way to capture the real story than in words.
