DocuSign (NASDAQ:DOCU) shares plummeted nearly 6% today after the eSignature solutions provider announced a restructuring plan aimed at long-term growth and boosting efficiency.
Under this plan, DocuSign aims to lower its headcount by nearly 6%. The layoffs are expected to primarily impact positions in its sales and marketing departments, resulting in non-recurring restructuring charges of $28 million to $32 million.
Further, the company expects to meet or outperform its outlook for the fourth quarter. DocuSign is slated to report its fourth-quarter results on March 7. Analysts expect the company to post an EPS of $0.65 on revenue of $699.2 million for the quarter. In the comparable year-ago period, its EPS of $0.72 had comfortably outpaced expectations by $0.13.
Today’s price decline comes on top of a nearly 13% drop in the company’s share price over the past five sessions. The massive value erosion is a result of waning investor hopes of a potential takeover of the company. Earlier, market chatter hinted at potential takeover interest from private equity names such as Bain Capital and Hellman & Friedman.
What Is the Future of DOCU Stock?
Overall, the Street has a Hold consensus rating on DocuSign, and the average DOCU price target of $59.33 implies a modest 11.5% potential upside in the stock.
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