By Angela Palumbo
DocuSign stock was climbing Friday as analysts praised the electronic-signature company’s earnings but remained cautious about its near-term prospects.
Shares of DocuSign were rising 9% in premarket trading Friday to $58.40. Coming into the session, the stock has gained 7.8% over the last 12 months has fallen 10% so far this year.
Fourth-quarter earnings were a “big step in the right direction for the DOCU story,” Wedbush analyst Dan Ives said in a research note. He raised his price target on the stock to $65 from $56, while maintaining a Neutral rating.
DocuSign reported fourth-quarter earnings, revenue, and bookings that beat analysts’ estimates after the stock market closed Thursday, and also issued better-than-expected revenue guidance.
“We substantially increased the amount of business from customers signing and renewing multiyear multimillion dollar contracts with DocuSign,” Chief Executive Allan Thygesen said on the company’s earnings conference call.
DocuSign also discussed its artificial-intelligence initiatives, which it will utilize to manage corporate agreements.
Analysts overall were satisfied with DocuSign’s results and revenue outlook, though many remain on the sidelines for now. Of the 26 analysts surveyed by FactSet, eight say the stock is a Buy, 15 have it a Hold, and three rate it a Sell.
“We continue to see further successful execution with its AI product portfolio picking up more steam heading into FY25 to accelerate profitable growth, but it will take more time to create more confidence with the Street with the AI story starting to pick up,” Ives said.
Needham analyst Scott Berg reaffirmed his Hold rating without a price target on the stock. He said in a research note that the fourth-quarter results were “solid.” However, “initial FY25 billings guidance suggest macro will continue to pressure net new business trends and expansions to remain challenging.”
DocuSign expects fiscal 2025 billings of between $2.97 billion and $3.02 billion. The low end of that guidance was in line with Wall Street estimates.
William Blair analyst Jake Roberge also maintained his Market Perform rating. He doesn’t have a price target on the shares.
“While the company’s recent results have been encouraging, we are maintaining our Market Perform rating until we see more evidence that DocuSign’s go-to-market and product changes are having a positive impact on the business,” he said in a research note.
Write to Angela Palumbo at angela.palumbo@dowjones.com