DocuSign Stock Brushes Off Quarterly Beat

Options traders and analysts are adding to the pessimism

Deputy Editor
Mar 10, 2023 at 10:20 AM
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The shares of DocuSign Inc (NASDAQ:DOCU) plunging is morning, last seen down 20.3% to trade at $51.31 -- a three-month low -- despite a better-than-expected fourth-quarter report.

The e-signature specialist stepped into the earnings confessional after yesterday's close, and reported adjusted earnings per share of 65 cents on revenue of $659.58 million, both of which beat Wall Street's estimates. However, the company also issued a soft forecast for the first-quarter and shared that CFO Cynthia Gaylor is stepping down after two years in the role, both of which are weighing on the shares this morning.

Bearish options traders were quick to respond. More than 26,000 puts have been traded so far, though 20,000 calls have also crossed the tape, with total volume running at 11 times the average intraday amount. New positions are opening at the two most popular contracts, the weekly 3/10 50- and 53-strike puts. 

Analysts are chiming in following the event, too. JP Morgan Securities, for example, downgraded DOCU to "underweight" from "neutral" and cut its price target to $48 from $58. Meanwhile, no less than three additional brokerages lowered their price objectives. Coming into today, 13 of the 16 covering analysts recommended a "hold" or worse rating on DocuSign stock.

Due to today's negative price action, the shares are trading below their 80-day moving for the first time since early December. Now pacing for their steepest weekly drop since June, DocuSign stock is now down 7.1% in 2023.



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