What Happened?
Shares of e-signature company DocuSign (DOCU) jumped 26% in the afternoon session after the company reported a strong "beat and raise" quarter that exceeded analysts' estimates on billings, revenue, and operating profit. Next quarter's billings guidance came in ahead, and full-year guidance was lifted for billings, revenue, and operating profit. Overall, we think this was still a very solid quarter with some key areas of upside.
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What The Market Is Telling Us
DocuSign’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. Moves this big are rare for DocuSign and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 14.4% on the news that the company reported fourth-quarter results that exceeded analysts' revenue, billings, and EPS estimates. Guidance was also decent, with revenue projection for the next quarter coming in ahead of expectations, while full-year guidance was roughly in line. Management highlighted the top drivers for the improved growth performance, including 1.) Solid execution around renewals, especially with large customers 2.) Stabilization in customer usage and retention 3.) Strong new customer acquisition volume. Even though guidance suggests a slowdown in growth, this quarter's results seemed fairly positive.
DocuSign is up 87.7% since the beginning of the year, and at $106.89 per share, has set a new 52-week high. Investors who bought $1,000 worth of DocuSign’s shares 5 years ago would now be looking at an investment worth $1,416.
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