DocuSign Inc.: Up 73.5% in 2019 & Hitting Fresh Highs After Strong Q2

DocuSign Inc.: Up 73.5% in 2019 & Hitting Fresh Highs
iStock.com/Michael Vi

DocuSign Inc Builds on Gains Following Strong Q2

DocuSign Inc (NASDAQ:DOCU) stock has been on a tear since the company reported strong second-quarter financial results and a solid outlook in early September.

Since then, DocuSign stock has continued to trend steadily higher. On October 11, it hit a new 52-week intra-day high of $68.11, for a year-to-date gain of 73.5%.

That new 52-week high is within striking distance of its August 28, 2018 all-time high of $68.35. By all accounts, DOCU stock should break through that resistance level in the coming weeks (or even days).

Thanks to strong first- and second-quarter revenue growth and strong guidance, a 12-month forecast for DocuSign stock of $95.00 is well within reach. That represents a gain of approximately 40% from the current level.

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DOCU Stock Overview

When it comes to autographs, no-one is as progressive as DocuSign. Founded in 2003, the San Francisco-based company pioneered e-signature technology, helping businesses automate how they prepare, sign, and manage agreements. (Source: “About DocuSign,” DocuSign Inc, last accessed October 11, 2019.)

The company’s “DocuSign Agreement Cloud” has become the go-to technology for people to sign agreements electronically, on any device, from anywhere on the planet, whenever they like.

The company has more than 535,000 customers and hundreds of millions of users in more than 180 countries. DocuSign’s clients include:

  • Seven of the top 10 technology companies
  • 90% of the top 20 pharmaceutical companies
  • 67% of the biggest financial services companies
  • 800 local, state, and federal agencies

DOCU Stock Information

Market Cap $11.7 Billion
52-Week Change 66.8%
52-Week High $68.11
52-Week Low $35.06
Shares Outstanding 173.8 Million
Float 124.0 Million
50-Day Moving Average $57.70
200-Day Moving Average $53.48

(Source: “DocuSign, Inc. (DOCU),” Yahoo! Finance, last accessed October 11, 2019.)

Second-Quarter Revenue Up 41%, Billings Grow 47%

On September 5, DocuSign announced that its revenue for the second quarter of fiscal 2020 (ended July 31) increased 41% year-over-year to $235.6 million. (Source: “DocuSign Announces Second Quarter Fiscal 2020 Financial Results,” DocuSign Inc, September 5, 2019.)

Subscription revenue advanced 39% year-over-year to $220.8 million while professional services and other revenue jumped 72% year-over-year to $14.8 million.

On top of that, billings were up 47% year-over-year, at $252.4 million.

During the quarter, DocuSign added 29,000 new customers, bringing its total customer base to 537,000.

The company reported a second-quarter net loss of $0.39 per share, compared to a net loss of $0.22 per share in the same period last year.

Adjusted net income was $0.01 per share, versus $0.03 per share in the second quarter of fiscal 2018.

The company ended the second quarter with cash, cash equivalents, restricted cash, and investments of $930.5 million.

The strong results come on the heels of the company’s recently released DocuSign Agreement Cloud offering. It’s the umbrella for its suite of more than 350 integrations, targeting the entire agreement process.

As a result of the better-than-expected adoption rate, DocuSign Inc raised its full-year guidance for fiscal 2020.

Revenue is now projected to be in the range of $947.0 and $951.0 million, up from the previous guidance range of $917.0 to $922.0 million. At the midpoint, this represents year-over-year revenue growth of 35%.

Analyst Take

DocuSign Inc stock is up 73.5% in 2019, seriously trumping the broader stock market.

The company reported strong back-to-back revenue growth and significantly raised its full-year revenue guidance. DocuSign continues to have excellent momentum, which should carry on in the fourth quarter of 2019 and into 2020.