Posted on July 6th, 2020
DocuSign Inc.’s (DOCU) stock displayed steady performance so far in 2020, with a solid rise that allowed it to effortlessly outperform the S&P 500, rising by approximately 151.7% over six months in comparison to the S&P 500’s loss of about 3.1%. It’s no surprise that DocuSign’s impressive value increase caused it to be added to the WhaleWisdom Heat Index 100 v2.0.
The worldwide provider of electronic signature solutions has faired quite well amidst economic volatility caused by the coronavirus pandemic. One likely factor for the stock’s strong performance is that its signature solutions are incredibly helpful for a variety of businesses and customers to move forward with signing contracts and agreements during a time of social distancing.
Hedge Funds Are Active
Both hedge funds and institutions were actively buying DocuSign’s stock in the first quarter, helping it to land on the WhaleWisdom Whale Index and further increase its aggregate share value. During the first quarter, the total 13F shares held by hedge funds increased to approximately 44.3 million, from about 42.9 million, an increase of almost 3.2%. Institutions also saw a rise, with an increase of roughly 0.5%, as institutional ownership increased to approximately 145 million from 144.4 million.
Analysts’ views and estimates for the company are quite favorable. Estimates are for DocuSign’s revenue to grow in fiscal 2021 by 35.1% to $1.32 billion. Meanwhile, the company’s earnings are forecast to grow by 54.3% to $0.48. Earnings are estimated to nearly triple by fiscal 2023 to $1.42 per share.
Wedbush Securities, Inc. remains bullish on the company, after DocuSign’s strong first quarter earnings. The firm referenced the stock’s value proposition around its core e-signature solution in the coronavirus environment is resonating with many businesses as the practice of working from home remains in place for the foreseeable future. Meanwhile, Oppenheimer & Co. Inc. views DocuSign as a core investment holding, giving it a $200 price target. Additionally, DocuSign jumped saw additional gains after the announcement that they would be added to the Nasdaq 100.
Bright Outlook Ahead
DocuSign is well-positioned to benefit from continued demand for its electronic signature solutions. Fiscal 2021 is off to a strong start with a robust performance in its first fiscal quarter ending April 20, 2020. With the continued potential for growth, the future looks bright for investors of this stock and the company regardless of how long the pandemic may or may not last.