DocuSign (DOCU) is a leader in the realm of electronic signatures. In addition, the organization provides document management services. The company will report its third-quarter fiscal 2022 earnings on December 2.
DocuSign had a solid second quarter, with revenues growing 50% year-over-year and profitability up 176.5% from the same quarter last year.
Given the rising pace of digitalization, DocuSign’s Agreement Cloud and flagship eSignature product should have continued to gain popularity, enabling DocuSign to announce solid results in the upcoming quarter.
We’ll use TipRanks’ Website Traffic tool, which analyzes website traffic volume data given by Semrush (SEMR), to try to obtain some key information about the firm, ahead of the Q3 print.
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Website Traffic Details
When looking at DocuSign’s online volume statistics, a discrepancy may be seen. DocuSign had a difficult time from Q2 to Q3. The number of unique visitors to its website fell by 1.8%, and the stock price dropped by 6.6%.
However, when comparing the year-to-date and year-over-year periods, total visits increased 50% and 26%, respectively.
This demonstrates that, while DocuSign has suffered in the near term, it is still attracting more visitors to its website than it did during the pandemic’s peak.
Q3 Expectations
Management expects revenues to be in the range of $526 – $532 million, with billings between $585 and $597 million. The business is expected to generate $530.63 billion in revenue for the same period, according to Wall Street.
Expansion in subscription revenues, as well as professional services and other revenues, are projected to have powered the top line, with both benefiting from solid client base growth.
The reopening of the economy and stabilization of demand patterns, on the other hand, may impact DocuSign stock, to some extent.
Expert’s Opinion
On October 12, William Blair analyst Bhavan Suri maintained a Buy rating on the stock.
The analyst believes that increased competition in the Contract Lifecycle Management (CLM) area, as well as difficulties in the mortgage market, will have an impact on DocuSign’s long-term growth.
On the other hand, Suri is upbeat about the company’s fundamentals, and writes, “We believe DocuSign still warrants a premium to the group given its faster growth, stronger margins, and robust market opportunity as compared to its peers.”
Wall Street’s Stance
Wall Street analysts also have given DocuSign a Strong Buy consensus rating, with 16 recent ratings, including 15 Buys and 1 Hold. The company is now trading at $249.9, with the average DOCU price target of $336.36, implying 34.6% upside from that level.
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