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Is DOCU Stock a Buy After 20% Plunge? 3 Analysts Weigh In on DocuSign Prices.

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DocuSign (NASDAQ:DOCU) stock is down 20% today after the company’s earnings failed to impress. Lowered guidance is also hurting shares.

Docusign (DOCU) logo on building

Source: Sundry Photography / Shutterstock.com

The San Francisco-based company specializes in the management of electronic contracts and agreements, including electronic signatures. Today, it reported adjusted earnings per share (EPS) of 48 cents. That figure was up 30% year over year. Revenue rose 35% to $580.8 million in the fourth quarter of 2021.

Looking ahead, the company forecast revenue for its current fiscal 2023 in a range of $2.47 billion to $2.48 billion, which is lower than the $2.61 billion that Wall Street had penciled in. The slowing growth and lowered guidance have combined to bring DOCU stock lower today. Its shares have now fallen 50% year to date, bringing the decline over the past six months to 73%.

It’s been a steep fall from grace for DocuSign, which saw demand for its products surge during the early days of the Covid-19 pandemic. That demand is now waning as a growing a number of businesses resume in-person meetings. As a result, shares are now nearly 80% below its 52-week high of $314.76 reached last September.

So, what do analysts have to say about DocuSign’s stock amid the current selloff? Here are three analysts’ price predictions.

DOCU Stock Price Predictions

  1. Wells Fargo has an “equal weight” rating on DOCU stock and an $80 price target, implying 7% upside from current levels.
  2. Evercore maintains an “outperform” rating on DocuSign’s shares and has a $100 price target, which would be 33% higher than where the stock currently trades.
  3. RBC Capital Markets also has an “outperform” rating on DOCU stock and a $95 price target, which would be 27% higher than where the shares currently sit.

What’s Next for DocuSign

Among 18 analysts who cover DocuSign, the median price target on the stock is currently $107, which implies 43% upside. Investors should keep in mind that most of the analyst ratings were made before DocuSign issued its latest quarterly results. Many analysts may now be revising down their forecasts in the wake of the poor results and lowered guidance. That said, it does appear that the majority of analysts who follow DocuSign see the stock rising over the next year. Right now, the consensus view is that the shares are a “moderate buy.”

On the date of publication, Joel Baglole 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.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

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