Docusign Stock Just Got Hammered. Here's Why the Market Got It Wrong and Why the Sell-Off Could Be a Buying Opportunity.
Docusign (NASDAQ: DOCU) shares tanked after the provider of electronic signature solutions cut its full-year guidance on billings. Billings are the total value of custom contracts signed, and are a leading indicator of future revenue growth.Despite the cut in billings guidance, I think the market is overreacting. Let's explore why.Docusign was a pandemic winner that saw steep revenue growth in 2020 and 2021. However, this growth wasn't a new normal; instead, it was a pulling forward of demand that then caused revenue growth to slow significantly. Docusign was far from the only company to experience this, as companies like Zoom Communications and Peloton Interactive also got caught in this trap.Continue reading
Docusign (NASDAQ: DOCU) shares tanked after the provider of electronic signature solutions cut its full-year guidance on billings. Billings are the total value of custom contracts signed, and are a leading indicator of future revenue growth.
Despite the cut in billings guidance, I think the market is overreacting. Let's explore why.
Docusign was a pandemic winner that saw steep revenue growth in 2020 and 2021. However, this growth wasn't a new normal; instead, it was a pulling forward of demand that then caused revenue growth to slow significantly. Docusign was far from the only company to experience this, as companies like Zoom Communications and Peloton Interactive also got caught in this trap.
