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DocuSign Inc DOCU

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Morningstar’s Analysis

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DocuSigning Its Way to Another Excellent Quarter; FVE Up to $152

Dan Romanoff, CPA Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

Narrow-moat DocuSign again reported strong quarterly results, including upside to our revenue and EPS expectations, and also provided a similarly strong outlook for the fourth quarter. All metrics once again were strong. Like other work-from-home enablers, DocuSign continues to benefit from an immediate surge in new customers and expansion of use cases within existing customers. We think the Agreement Cloud will begin to shine in fiscal 2021 and think DocuSign’s quarter reinforces the notion that the company is benefiting from a market that is largely greenfield. We also think the recent acquisitions of Seal for AI and Liveoak for video collaboration and remote notary service expand the TAM and make the Agreement Cloud a more attractive platform. Based on near-term benefits of ongoing lockdowns, more sustainable growth, and a rapidly improving margin profile, we are significantly raising our fair value estimate to $152 per share, from $112 previously, although we still see shares as trading at a premium.

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Company Profile

Business Description

DocuSign offers the Agreement Cloud, a broad cloud-based software suite that enables users to automate the agreement process and provide legally binding e-signatures from nearly any device. The company was founded in 2003 and completed its IPO in May 2018.

221 Main Street, Suite 1550
San Francisco, CA, 94105
T +1 415 489-4940
Sector Technology
Industry Software - Application
Most Recent Earnings Oct 31, 2020
Fiscal Year End Jan 31, 2021
Stock Type Speculative Growth
Employees 3,909