DocuSign stock plunges after company gives weak fourth quarter guidance – .

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DocuSign stock plunges after company gives weak fourth quarter guidance – .


Shares of electronic signature software maker DocuSign fell more than 39% on Friday morning after the company released a fourth-quarter forecast below analyst estimates.
DocuSign predicted fourth-quarter revenue to be between $ 557 million and $ 563 million, while analysts on average expected revenue of $ 573.8 million for the quarter, according to Refinitiv.

Still, DocuSign exceeded analysts’ expectations for the third quarter, reporting earnings per share of 58 cents, adjusted, from 46 cents expected by analysts, and $ 545.5 million in revenue versus $ 531 million expected, according to Refinitiv.

Several companies, including JPMorgan, Piper Sandler, UBS and Wedbush, downgraded their stock ratings in the wake of the earnings report. While Citi analyst Tyler Radke maintained a buy rating, he lowered his price target from $ 389 to $ 231, calling the report “one of the biggest [software as a service] flashes of recent memory. “

“The tailwinds of the pandemic have stopped much faster than expected for DocuSign, catching the company off guard,” JPMorgan analyst Sterling Auty wrote in a note to clients.

The business grew rapidly as it benefited from the rise of remote working during the pandemic. DocuSign announced its sixth consecutive period of revenue growth of over 40%, but said that in the next quarter it expects growth of around 30%.

CEO Dan Springer conceded that the figure would be a disappointment after such exceptional growth earlier in the year.

“While we expected a possible decline from the record growth levels reached at the height of the pandemic, the environment has changed faster than expected,” Springer said on the earnings call.

The company also said its international chairman, who was previously chief financial officer, left the company on November 30.

-Ari Levy of CNBC contributed to this report.

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