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DocuSign (DOCU) Q1 Earnings Report Preview: What To Look For


Jabin Bastian /
2022/06/08 7:08 am EDT
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E-signature company DocuSign (DOCU) will be reporting earnings tomorrow after market close. Here's what to look for.

Last quarter DocuSign reported revenues of $580.8 million, up 34.7% year on year, beating analyst revenue expectations by 3.42%. Despite the strong topline results, it was a weaker quarter for the company, with the guidance for both the next quarter and the full year below analysts' estimates.

Is DocuSign buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting DocuSign's revenue to grow 24% year on year to $581.8 million, slowing down from the 57.9% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.46 per share.

DocuSign Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 5.4%.

Looking at DocuSign's peers in the productivity software segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Box delivered top-line growth of 17.7% year on year, beating analyst estimates by 1.68% and Dropbox reported revenues up 9.92% year on year, exceeding estimates by 0.59%. Box traded down 2.99% on the results, Dropbox was up 1.96%. Read our full analysis of Box's results here and Dropbox's results here.

There has been positive sentiment among investors in the software segment, with the stocks up on average 3.18% over the last month. DocuSign is up 25.8% during the same time, and is heading into the earnings with analyst price target of $103.2, compared to share price of $91.06.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.