DocuSign’s ‘hyper growth story is essentially over,’ Wedbush says in downgrade


Shares of DocuSign Inc. DOCU, +5.96% were off more than 4% in premarket trading Tuesday after Wedbush analyst Dan Ives cut his rating on the e-signature stock to underperform from neutral, citing a more challenging landscape for a company that was a big winner early in the pandemic. “[W]e believe the company is seeing a much more difficult selling environment as the company expands into broader CLM [contract-lifecycle-management] deals with e-signature going through a major growth transition in the field,” Ives wrote. The company has been trying to move beyond its trademark e-signature capabilities and sell customers on a more expansive suite of services that helps them manage contracts in all stages. “In a nutshell, we see darker days ahead for DOCU as expanding into larger CLM deals will be more difficult, especially in a more normalized post COVID selling environment,” Ives wrote. “While DOCU remains in a firm position to expand its e-signature platform through broader strategic deals, we believe the company’s hyper growth story is essentially over.” The shares have lost 60% over the past 12 months as the S&P 500 SPX, +0.57% has dropped about 1%.

Source: Marketwatch

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