Chances are that you know DocuSign (NASDAQ:DOCU) as an e-signature software specialist. That’s the company’s bread and butter, but DocuSign has a more diversified business model. Furthermore, DOCU stock looks cheap and on the cusp of a comeback as DocuSign’s financial outlook is largely positive.
DocuSign became a celebrity company on Wall Street in the midst of the Covid-19 pandemic. That was several years ago, though, and DocuSign is still evolving. For instance, Dan Springer is no longer DocuSign’s CEO as he’s been replaced by Allan Thygesen.
Prospective investors shouldn’t view DocuSign as a troubled business, but as a company in transition with turnaround potential. Hesitating might only lead to regret, so consider taking action before the crowds rush in.
Seize the Moment with DOCU Stock
Why am I so gung-ho about DOCU stock? To put it simply, there’s a rare and perfect setup here. DocuSign shares fell 80% from their 2021 peak price, yet in early 2023, they’re starting to curl up and head higher.
That’s what it looks like when the smart money buys cheap shares from panicky amateur traders. Forward-thinking investors know that DocuSign is still a go-to source for e-signature services. Besides, there’s more to the company than casual observers might think.
Maybe it’s time to stop thinking of DocuSign as an e-signature company, and instead consider it a contract lifecycle management (CLM) company. The company has evolved and expanded dramatically through a number of value-added acquisitions: Clause for smart contracts, LiveOak Technologies for notary services, Seal for artificial intelligence analytics and SpringCM for comprehensive CLM services.
DocuSign Anticipates a Successful Quarter
Despite DocuSign’s impressive evolution as a business, shortsighted traders have hastily dumped their shares. They’ll likely wish they stayed in the trade as DocuSign is poised to deliver excellent quarterly results.
There are no guarantees, of course, but DocuSign is guiding for $637 million to $641 million in revenue during the quarter ending Jan. 31, 2023. That wouldn’t be too shabby, considering the impact of elevated inflation and corporate downsizing amid a shaky economy.
Also for this quarter, DocuSign expects to achieve non-GAAP gross margin of 82% to 83%. That’s not a misprint; DocuSign’s margins really could be that high and Wall Street should be duly impressed. The question then is whether you want to take a position in DocuSign before the company delivers a round of impressive results, or after.
What You Can Do Now
Before you dismiss DocuSign as just a pandemic darling, conduct your due diligence on the company. You’ll surely find that DocuSign remains an e-signature service leader but also provides a diversified set of products.
Then, think about how the market overreacted and demolished DOCU stock, but now the shares are starting to regain their value. There’s a time for waiting and hesitating, but this isn’t it.
Contrarians are invited to step forward and sign on the dotted line, if they dare, with a confident share position today in DocuSign.
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 InvestorPlace.com Publishing Guidelines.
