Why DocuSign Stock Soared Friday

The e-signature and electronic-document company’s revenue rocketed past analyst estimates. Here’s what you should know.

| More on:
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

What happened

Shares of DocuSign (NASDAQ: DOCU) jumped on Friday, rising as much as 23.9%. As of 10:30 a.m. EDT, the stock was up about 20%. The stock’s gain follows the e-signature and electronic-document specialist’s second-quarter results of fiscal 2020.

Bullishness for the stock is likely related to the company’s better-than-expected quarterly revenue and its strong guidance.

Image source: Getty Images.

So what

DocuSign reported second-quarter revenue of $235.6 million, up 41% year over year. On average, analysts had been expecting revenue of $220.9 million. Non-GAAP (adjusted) earnings per share for the period were $0.01, down from $0.03 in the year-ago period and below analysts’ average forecast for adjusted earnings per share of $0.04.Â

“With revenue growth exceeding 40% and billings growth at 47%, our second quarter performance reflects our clear leadership position in e-signature and increasing adoption of our broader Agreement Cloud offering,” said DocuSign CEO Dan Springer in the company’s second-quarter earnings release.

Now what

The tech company‘s outlook was strong. Management said it expected its fiscal third-quarter revenue to be between $237 million and $241 million — ahead of a consensus analyst forecast for $232 million. The company also raised its full-year outlook, with management guiding for fiscal 2020 revenue between $947 million and $951 million, up from a previous forecast for revenue between $917 million and $922 million.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends DocuSign. The Motley Fool has a disclosure policy.

More on Tech Stocks

A worker uses a laptop inside a restaurant.
Tech Stocks

2 U.S. Stocks Canadian Investors Can Buy and Hold Forever

Blue-chip companies such as Microsoft and Coca-Cola are forever stocks that have the potential to beat the market in 2022…

Read more »

financial freedom sign
Tech Stocks

1 U.S. Stock to Buy in August That Could Make You a Millionaire

Are you looking for stocks outside the TSX to add to your portfolio? Buy this one company that trades in…

Read more »

young woman celebrating a victory while working with mobile phone in the office
Tech Stocks

2 Beaten-Down Growth Stocks You’ll Be Happy You Own in 2032

Buying these oversold TSX stocks could make you rich by 2032.

Read more »

shopping online, e-commerce
Tech Stocks

Shopify Stock: Could it Reach $100 in 2022?

Shopify stock (TSX:SHOP)(NYSE:SHOP) has seen a huge uptick in daily trading volume, with shares up 28% in the last month.

Read more »

money cash dividends
Tech Stocks

Got $1,000? Buy These 4 TSX Stocks in Bulk!

These four TSX stocks are rebounding already, and offer a substantial opportunity for long-term Motley Fool investors.

Read more »

A stock price graph showing growth over time
Tech Stocks

3 Cheap Growth Stocks to Buy Right Now

Given their growth prospects and cheaper valuations, these three TSX stocks could deliver superior returns in the long run.

Read more »

Overhead shot of young adults using technology at a table
Tech Stocks

3 Stocks I’m Buying During a Tech Stock Correction

Tech stocks like Constellation Software (TSX:CSU) should be on your radar.

Read more »

financial freedom sign
Tech Stocks

$5,000 Invested in These 3 Stocks Could Make You Rich Over the Next 20 Years

Are you looking for stocks that could carry your portfolio over the next 20 years? Here are three top picks!

Read more »