Is Now a Good Time to Buy Shares in DocuSign?

WAN CHAI, Hong Kong - March 29, 2022 - PRLog -- The shares of the e-signature and electronic document provider dropped more than 20% on Friday. The stock has now dropped more than 75% from its 52-week high of $314.76. During the pandemic, the stock virtually lost all of the profits it saw as a result of remote work and cooperation. Has the sell-off in growth stocks gone too far?

Despite the stocks steep drop on Friday, the company's fiscal fourth-quarter earnings were actually fairly excellent. During this time, DocuSign's revenue increased by 35% year over year, reaching $581 million. This was more than the average expert expectation of $561 million in sales. The company's non-GAAP (adjusted) profits per share of $0.48 increased significantly from $0.37 in the previous quarter. Free cash flow increased as well, rising from $44 million to $70.3 million in the previous quarter.

DocuSign's business and development prospects appear to be robust, based on management's upbeat comments in its results announcement and the company's plan to launch a share repurchase program. "Digital transformation and the need to agree from anywhere is a key priority for companies around the world as we approach into Fiscal 2023," DocuSign CEO Dan Springer stated in the company's fiscal fourth-quarter results statement. "People aren't returning to paper when they return to the workplace."

DocuSign's board of directors approved up to $200 million in stock repurchases as part of the company's new buyback program. During the company's earnings call, DocuSign Chief Financial Officer Cynthia Gaylor noted, "This initiative underlines our confidence in the solid fundamentals of our business and allows us to flexibly utilize our balance sheet in order to effectively provide returns to our shareholders." Repurchase plans are typically a reflection of management's confidence in a stock's long-term prospects since it makes no sense to buy back stock unless management feels its shares are vastly undervalued.

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