© Reuters. Should you buy DocuSign for late returns?
The share price of software company DocuSign (DOCU) fell nearly 42% on December 3 and hit a 52-week low of US$131.51. But can the stock rebound based on the company’s market dominance and consistent product and service solutions? Let us find out. Cloud-based software provider DocuSign, Inc. (NASDAQ:) is mainly known for its DocuSign electronic signature solution and agreement cloud. The San Francisco-based company has witnessed a huge demand for its solutions amid the COVID-19 pandemic and the growing remote work culture. However, after hitting a 52-week low of $131.51, the stock has fallen 52.3% in the past month and closed at $135.09 during Friday’s trading session.
DOCU’s total revenue for the third fiscal quarter ended October 31, 2021 increased 42.4% year-on-year to $545.4 million. Its net loss was 5.68 million U.S. dollars, compared with 58.49 million U.S. dollars in the same period last year. In addition, its turnover was 562 million U.S. dollars, a year-on-year increase of 28%. However, due to concerns about the slowdown in demand for electronic signatures after companies return to the office, the stock fell 42% on Friday, the biggest drop in history.
The company’s billing and revenue guidance was lower than expected. Its fourth-quarter revenue forecast is between 557 million and 563 million U.S. dollars, which is lower than Wall Street’s expectations. Therefore, several analysts downgraded the rating of DOCU. In addition, hedge fund interest in the stock has also declined. Therefore, the near-term prospects of DOCU look uncertain.
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