Is DOCU Stock a Buy? The Answer Is Definitely Yes!

  • DocuSign (DOCU) is undergoing a major transition with a new chief executive.
  • So far, however, DocuSign’s financial results have been encouraging.
  • Investors should hold a few shares of DOCU stock as the company appears to be turning a corner.
DOCU stock - Is DOCU Stock a Buy? The Answer Is Definitely Yes!

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Transitions aren’t easy, but sometimes they’re necessary. Could a new leader help steer DocuSign (NASDAQ:DOCU) in the right direction, after the e-signature company seemingly lost its way? The answer remains to be seen, but it’s worthwhile to hold a handful of DOCU stock shares because DocuSign’s comeback could be 2023’s biggest story on Wall Street.

Okay, so maybe that’s an exaggeration, but DocuSign does offer turnaround potential. As we’ll discuss in a moment, DocuSign has a relatively new chief executive and this could mark a new chapter for the company.

Besides, DocuSign’s recently published quarterly results should give the company’s stakeholders a much-needed shot in the arm. The stock is still cheap, so now’s a great time to sign on the dotted line and pick up a few bargain-priced DocuSign shares.

New Chief Executive Might Save DOCU Stock

Believe it or not, DOCU stock was worth more than $130 a year ago. However, the shares recently traded between $50 and $60. That’s certainly not what DocuSign’s long-term investors signed up for.

However, there appears to be a prime value-hunting opportunity here. Around half a year ago, DocuSign ousted CEO Dan Springer and then, a few months later, replaced him with Allan Thygesen. That was a smart move, as Thygesen has an impressive track record with Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google.

It’s still too early to determine whether Thygesen will ultimately steer the ship onto the right course. Just maybe, he can help DocuSign capture the estimated $50 billion market opportunity in e-signature software and related products.

Quarterly Results Are a ‘Step in the Right Direction’ for DocuSign

While investors wait for Thygesen to prove himself as DocuSign’s CEO, they can read the company’s third-quarter fiscal 2023 results and smile. They’ll undoubtedly appreciate DocuSign’s top-line result, which outpaced Wall Street’s estimate.

So, let’s get down to the nitty-gritty. DocuSign reported revenue of $645.5 million, up 18% year-over-year (YOY). That result handily beat analysts’ estimate of $627 million.

Was DocuSign profitable during Q3 of fiscal year of 2023? The answer depends on how we measure the result. Using GAAP measurements, DocuSign posted a net earnings loss of 15 cents per share.

However, using non-GAAP measurements, the company reported net income of 57 cents per share, beating Wall Street’s forecast of 42 cents per share. In light of these results, Wedbush’s Dan Ives called the quarter “a step in the right direction” for DocuSign.

What You Can Do Now

Investors can certainly hope that the company’s new chief executive will put DocuSign back on the right path. DocuSign was a clear winner in the wake of Covid-19, and it could be a winner again in 2023.

At least, the bulls can point to DocuSign’s revenue growth as an indication of improvement. Therefore, even though CEO transitions typically involve risk, it still makes sense to take a small stake now in DOCU stock.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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