DocuSign (NASDAQ:DOCU) shares are in focus today after the e-signature solutions provider delivered a better-than-expected performance for the third quarter. Revenue increased by 9% year-over-year to $700.4 million, exceeding estimates by about $10 million. Moreover, EPS of $0.79 outperformed expectations by a wide margin of $0.16.
During the quarter, Billings increased by 5% year-over-year to $691.8 million, and Subscription revenue ticked up by 9% to $682.4 million. However, the company’s revenue from Professional services declined by 16% to $18.1 million.
Impressively, the company’s free cash flow for the quarter soared to $240.3 million compared to $36.1 million in the year-ago period. In addition, a new engineering center in India is expected to help DocuSign tap top talent and accelerate critical data-focused product innovation.
For Fiscal Year 2024, DocuSign expects total revenue to hover between $2,746 million and $2,750 million. Billings for the year are anticipated between $2,835 million and $2,845 million. For the upcoming quarter, the company expects total revenue in the range of $696 million to $700 million.
What is the Forecast for DOCU Stock?
Following this performance, JMP Securities’ Patrick Walravens reiterated a Buy rating on DocuSign alongside a $84 price target. Walravens views the stock favorably owing to, “Strategic leadership hires, improving customer acquisition value, and early signs of stabilization in consumption across various sectors.”
Overall, the Street has a Strong Buy consensus rating on DocuSign. Shares of the company have run up nearly 16% over the past month, and the average DOCU price target of $73.25 implies a further 54.4% potential upside in the stock.
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