UPDATE: Morgan Stanley Downgrades Docusign Inc. (DOCU) to Underweight
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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."
Shares of Docusign Inc. closed at $53.47 yesterday.
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