DocuSign (DOCU) Beats Q2 and Outlook Views, Analysts Positive and Raise Numbers
DocuSign (NASDAQ: DOCU) reported better-than-expected Q2 results and guidance.
DOCU reported Q2 EPS of $0.47 to top the analyst estimate of $0.40. Revenue for the quarter came in at $511.8 million versus the consensus estimate of $487.5 million.
"I'm proud of how our team has continued to stay in front of the evolving COVID business environment, helping our over one million customers and over one billion users move forward. This has driven strong performance for our business, reflected in our 50% year-over-year Q2 revenue growth," said Dan Springer, DocuSign's CEO.
DOCU also presented Q3 and FY revenue guidance as it expects to generate between $526 million and $532 million in the current quarter, higher than the consensus of $520.62 million. Full-year revenue is seen between $2.078 and $2.088 billion, versus the consensus of $2.05 billion.
Morgan Stanley Stan Zlotsky hiked the price target to $350.00 per share from the prior $295.00 as he claims there’s plenty of growth left in the tank.
“Q2 earnings once again highlighted that despite lapping tougher COVID-driven compares from last year, growth is not going to fall off a cliff. As expected, billings did decelerate to 45% vs 54% in Q1, but they still meaningfully outperformed our/consensus estimates, and were at least inline with buy-side expectations. Full year billings guidance was increased by $19M more than the beat in Q2, and the year now looks for 40%+ growth, vs 56% in FY21, and well above the pre-COVID mid-30% pace. Although there could be areas to pick at, like NRR ticking down a point and conservatism in 2H outlook, we believe that the stock is not priced for the kind of growth and profitability the company is delivering, and expectations for dramatic deceleration in FY23 are overblown,” Zlotsky said in a note.
Wolfe analyst Alex Zukin reiterated an Outperform rating and a $340.00 per share price target after the company delivered a solid quarter on tough comps.
“Shares are likely to be range bound as flowing through current upside to revenue and billings yields an exit growth rate for 4Q of 40% for subscription revs and 37% for billings. As a result, we are reducing our upside CY23 revenue by ~$420M but remain positively biased as we view sustainability in high growth trends for many years,” Zukin said in a note sent to clients.