UPDATE: Morgan Stanley Downgrades Docusign Inc. (DOCU) to Underweight

October 3, 2022 4:16 AM EDT
Get Alerts DOCU Hot Sheet
Price: $46.73 -3.23%

Rating Summary:
    6 Buy, 15 Hold, 4 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 2 | Down: 23 | New: 24
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(Updated - October 3, 2022 8:17 AM EDT)

Morgan Stanley analyst Josh Baer downgraded Docusign Inc. (NASDAQ: DOCU) from Equalweight to Underweight with a price target of $47.00 (from $73.00).

The analyst commented, "While DOCU shares are down ~64% YTD, underperforming MS Research Analyst Josh Baer’s SMID cap coverage by ~20%, he sees additional downside and an unattractive risk / reward relative to other SaaS / Future of Work He downgrades DOCU from EW to UW, and reduces his PT from $73 to $47. Near-term, Josh expects continued execution issues stemming from a combination of a 1) demand gap post-covid, 2) transition period following significant leadership turnover and attrition, 3) large new cohort of sales reps slowly ramping, 4) recently announced restructuring/reduction in headcount to cause additional near-term disruption – all exacerbated by the challenging macro environment and leading to his forecast for only 3% YoY billings growth in the next-twelve months, even against easier compares. Medium-term, after DocuSign works its way through these near-term challenges and transition period, he expects 1) intensifying competition and 2) commoditization of core digital signature capabilities to 3) lead to pricing pressure, limiting DocuSign to a low double-digit growth profile in the coming years, in his view."

For an analyst ratings summary and ratings history on Docusign Inc. click here. For more ratings news on Docusign Inc. click here.

Shares of Docusign Inc. closed at $53.47 yesterday.

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