DocuSign, Inc. (NASDAQ:DOCU) Reported Earnings Last Week And Analysts Are Already Upgrading Their Estimates

NASDAQ:DOCU) shareholders, with the stock dropping 20% to US$216 in the week since its latest quarterly results. The results don’t look great, especially considering that statutory losses grew 26% toUS$0.35 per share. Revenues of US$342m did beat expectations by 7.4%, but it looks like a bit of a cold comfort. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We’ve gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.” data-reactid=”28″>It’s been a mediocre week for DocuSign, Inc. (NASDAQ:DOCU) shareholders, with the stock dropping 20% to US$216 in the week since its latest quarterly results. The results don’t look great, especially considering that statutory losses grew 26% toUS$0.35 per share. Revenues of US$342m did beat expectations by 7.4%, but it looks like a bit of a cold comfort. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We’ve gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for DocuSign ” data-reactid=”29″> Check out our latest analysis for DocuSign

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Taking into account the latest results, the consensus forecast from DocuSign’s 17 analysts is for revenues of US$1.38b in 2021, which would reflect a decent 19% improvement in sales compared to the last 12 months. Losses are expected to be contained, narrowing 12% from last year to US$0.99. Before this earnings announcement, the analysts had been modelling revenues of US$1.32b and losses of US$1.01 per share in 2021. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrades to both revenue and loss per share forecasts for this year.

The consensus price target rose 28% to US$240, with the analysts encouraged by the higher revenue and lower forecast losses for next year. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on DocuSign, with the most bullish analyst valuing it at US$300 and the most bearish at US$112 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It’s pretty clear that there is an expectation that DocuSign’s revenue growth will slow down substantially, with revenues next year expected to grow 19%, compared to a historical growth rate of 40% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% next year. Even after the forecast slowdown in growth, it seems obvious that DocuSign is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

see them free on our platform here..” data-reactid=”51″>With that in mind, we wouldn’t be too quick to come to a conclusion on DocuSign. Long-term earnings power is much more important than next year’s profits. At Simply Wall St, we have a full range of analyst estimates for DocuSign going out to 2025, and you can see them free on our platform here..