Wedbush upgraded the stock to "neutral" from "underperform"
Shares of Docusign Inc (NASDAQ:DOCU) are up 2.7% at $45.72 ahead of the bell, following an upgrade from Wedbush to "neutral" from "underperform." The analyst maintained its $55 price target, noting that the negative catalysts for its more than 70% year-to-date deficit have already played out. Wedbush also noted that the company could be a prime merger and acquisition (M&A) candidate "by a financial/strategic player" if the stock's negative price action continues.
Most members of the brokerage bunch have taken a tepid stance on DOCU, and the stock has been the target of quite a few bear notes during the past few months. Coming into today, 10 of the analysts in coverage called the stock a "hold," while four said "sell" or worse and only two said "strong buy."
Short sellers have also been piling on, up 11.1% in the last reporting period. The 19.52 million shares sold short make up 9.9% of the stock's available float, and would take nearly a week to buy back at the stock's average daily pace of trading.
The stock is sitting firmly in "oversold" territory, which indicates that a short-term bounce could already be priced in. DOCU definitely needs one. The security hit a three-year low of $44.20 during yesterday's session. Several short- and long-term trendlines have helped guide the stock lower, including the 80-day moving average, which has rejected several rally attempts since September of last year.