Why This DocuSign Analyst Says There's Downside Ahead

DocuSign Inc (NASDAQ: DOCU) has an elevated risk profile given the CEO transition, execution challenges, high employee turnover and a deteriorating macro environment, according to Piper Sandler.

The DocuSign Analyst: Rob Owens downgraded DocuSign from Neutral to Underweight and lowering the price target from $65 to $54.

The DocuSign Tajeaways: The company’s revenues are unlikely to reacceleration in the near-term, Owens said in the downgrade note.

“Recent commentary from DOCU has attributed softening growth in part to the weaker macro backdrop and post-COVID demand normalization,” the analyst wrote.

Commentary from competitors like Adobe Inc (NASDAQ: ADBE) “suggests that these dynamics are not felt equally,” he said. 

Check out other analyst stock ratings.

“While we acknowledge an approximately 80% drop in shares from peak levels, we remain cautious and believe the primary upside driver would come only from a potential takeout,” Owens further mentioned.

DOCU Price Action: Shares of DocuSign were trading down slightly at $67.64 midday Thursday.

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