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DocuSign stock drops dramatically 30% when the pandemic anxiety fades.


DocuSign Inc. shares fell nearly 30% in after-hours trading Thursday after the company’s billings and revenue estimate fell short of forecasts and its CEO revealed a pandemic spike had worn off in the quarter.

DocuSign DOCU, +1.31 percent handily above third-quarter forecasts in its earnings announcement Thursday afternoon, but the company’s billings (which reflect future business under contract) and fourth-quarter forecast were lower than expected. The CEO of the electronic-signature company noted in a statement that the massive rise seen during the COVID-19 outbreak appeared to be waning.

“After six quarters of fast growth, we saw consumers revert to more normalized purchase habits, resulting in 28 percent year-over-year billings increase,” said CEO Don Springer in the announcement on Thursday.

DocuSign shares fell more than 25% to a 52-week low in the extended session, wiping out more than $10 billion in market capitalization if the decline continues through Friday’s trading day. DocuSign was worth less than $20 billion when the pandemic began, but it skyrocketed to moreover $40 billion in April 2020 as businesses tried to close deals without the ability to sign documents in person.

DocuSign reported a third-quarter loss of $5.7 million, or 3 cents per share, on $545.5 million in sales, up from $382.9 million the previous year. After adjusting for stock-based compensation and other variables, the company reported earnings per share of 58 cents, up from 22 cents a year ago. According to FactSet, analysts projected adjusted earnings per share of 46 cents on revenues of $532.6 million, which DocuSign easily exceeded.

However, billings of $565.2 million fell short of the company’s own target of $585 million to $597 million as well as analysts’ average forecast of $594 million. According to FactSet, management guided for revenue of $557 million to $563 million and billings of $647 million to $659 million in the fourth quarter, while analysts expected sales of $575 million and billings of $705.4 million.

DocuSign shares have already steadied down in 2021 after surging early in the month, rising 5.2 percent so far this year while the S&P 500 index SPX, +1.42 percent gained 20.2 percent.


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Kathy Lewis

Kathy Lewis is an all-around geek who loves learning new stuff every day. With a background in computer science and a passion for writing, she loves writing for almost all the sections of Editorials99.

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