Analyst Note
| Dan Romanoff |Narrow-moat DocuSign reported solid second-quarter results, with both top-line and non-GAAP operating margin exceeding our expectations. Operating margin remains strong as a result of recent headcount reductions. Margins are expected to decline throughout the remainder of the year though, as DocuSign continues to innovate and invest in its products such as ID Verification and the expanded availability of DocuSign Monitor. Despite the macroeconomic headwinds, good results and a raised full-year outlook indicate that DocuSign is confident enough in its core business to invest in its products even in a difficult operating environment. DocuSign has executed well by focusing on margins, streamlining its sales approach, and accelerating product innovation. We keep our fair value estimate of $74. We see shares as attractive for patient investors, but continue to prefer some of our wide-moat names as macroeconomic uncertainty persists.