Analyst Eyes Near-Term Issues for DocuSign

RBC Capital said DOCU "is effectively on hold til the company finds a new CEO"

Digital Content Manager
Aug 22, 2022 at 9:53 AM
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The shares of DocuSign Inc (NASDAQ:DOCU) are down 4% at $63.29 this morning, following a downgrade from RBC Capital to "sector perform" from "outperform." The analyst also lowered its price target to $65 from $80, noting a rocky near-term setup and the company's issues with high employee turnover rates. RBC added that DocuSign's turnaround "is effectively on hold until the company finds a new CEO."

DOCU is no stranger to bearish analyst coverage. Just one month ago, Piper Sandler downgraded the equity to "underweight." Even more brokerages could follow these analysts' leads, considering three of the 13 in coverage still called the stock a "buy" or better coming into today. Plus, the 12-month consensus price target of $87.97 is a 33.5% premium to Friday's close. 

It looks like options traders are already taking a bearish stance. The equity's Schaeffer's put/call volume ratio (SOIR) of 1.07 sits higher than 78% of readings from the past year. This implies short-term options players have rarely been more put-biased. 

The security is coming off a late-July rally attempt, which ran out of steam at the 100-day moving average earlier this month. DOCU just fell back below its 10-day moving average, too, after it helped to guide the stock away from its June 30 annual low of $55.86. Year-to-date, the equity has shed more than 56%. 

 

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