DocuSign Q1 FY1/24 Earnings Review
Life in the old doc yet?
DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security, or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note’s date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications.
The Time To Buy Is Always When It Seems A Dumb Time To Buy
What can we find to say that is good about DocuSign DOCU 0.00%↑ ? Fundamentals are worsening more slowly than they were. Meaning, the deceleration in revenue growth is less marked; TTM EBITDA margins continue to climb and the yawning delta between cashflow and EBITDA (caused by poor working capital performance in the prior three quarters) is starting to close.
The stock is demonstrating an accumulation pattern. Huge volume within a sideways range at the lows.
If you forgot the ticker was DOCU (boo, hiss! bad!) and you went back in time 6-9 months, you would see tech stock after tech stock where all the above was true, on fundamentals and on the chart. And many of those names have since broken out to the upside.
So - DOCU may do something similar. On the other hand, it's a boring, commoditized enterprise software company, so, consider our Stop Zone in case you're thinking of following this idea.
For our Premium and Pro subscribers we now walk through the numbers, valuation, stock chart, upside potential and risk management.