the docusign-Aktien (WKN: A2JHLZ) crashed again. After the announcement of the new quarterly figures, the American company, specializing in electronic signatures, once again lost a fifth of its market value.
Is the stock a buy now? Or should investors pull the opening string? Given that DocuSign’s stock has now lost about three-quarters of its own market value, a sale makes little sense, at least in terms of stock price.
But let’s look at three relevant key figures that now underline the potential or the risks. Depends on what you’re leaning towards at the moment.
DocuSign Stock: Market Capitalization
DocuSign stock currently has a significantly lower market value. After the correction and at the end of the week, the market capitalization is only $14.8 billion. Ultimately, the question is: How big is the overall market and how big is the potential for the company? Competitors are also important, of course.
But basically I’m inclined to say: the market for electronic signatures with all its operational features is bigger. Even internally in companies, processes can be digitized, transactions can be sealed and resolved more efficiently. Also crucial: companies save postal routes and thus additional costs.
It looks like DocuSign’s stock will continue to grow. Some analysts expect the average growth rate to be 35% between 2019 and 2025. COVID-19 and the pandemic have anticipated much of this. But there is still potential.
growth in 2023
DocuSign’s stock management expects further growth in fiscal year 2023 (ie, the current one). Revenue should be at least US$2.47 billion. That represents at least 17.6% year-over-year growth compared to prior fiscal 2022 revenue of $2.1 billion. So a 45% sales growth would be a thing of the past.
Of course, this forecast promises much less. However, in a post-pandemic period, this may be a short-term brake. Ultimately, however, the digitization megatrend should at least enable double-digit growth rates for years, perhaps decades. That is the basis that long-term investors are investing in now if they believe in the opportunity. In any case, with a price/sales ratio of around 6 by 2023, the valuation is not expensive.
DocuSign Stock: Positive Net Results!
While DocuSign’s stock fell into the red last fourth quarter with net income of -$0.15 per GAAP, the growth story is indeed profitable. On a non-GAAP basis, fourth quarter earnings were $0.48. By contrast, in fiscal 2022, the value was $1.98 on a non-GAAP basis with a loss of $0.36 on a GAAP basis.
Adding in earnings growth over the next several years would put DocuSign’s stock in a strong position. On a non-GAAP basis, the price-earnings ratio is currently 37.9. That may also provide a somewhat different and inexpensive view of this growth stock.
The article DocuSign Stock After the Crash: 3 Metrics You Need to Know Now! first appeared in The Motley Fool Germany.
Vincent does not own any of the shares mentioned. The Motley Fool owns stock and recommends DocuSign.
Motley Fool Germany 2022