DOCU - Embedded Expectations Analysis - 2021 07 23
DocuSign, Inc. (DOCU:USA) currently trades at a significant premium to UAFRS-based (Uniform) assets, with a 47.8x Uniform P/B. At these levels, the market is pricing in expectations for profitability to inflect positively, but management may have concerns about customer additions growth, Agreement Cloud opportunities, and digital client transformation.Specifically, management may lack confidence in their ability to capitalize on Agreement Cloud opportunities, preserve customer additions growth, and digitally transform clients' internal and external contracting processes. In addition, they may have concerns about the revenue mix for NewCo's existing customers, the customer mix between existing and new customers, and PPP loans turning to loan forgiveness. Moreover, they may also lack confidence in their ability to land larger customers, maintain dollar-based net expansion levels, and sustain strong execution for the fiscal year. Finally, they may be exaggerating their optimism for the future.
DocuSign provides e-signature solution as the main part of its cloud software suite for automating the agreement process. The company calls its suite the DocuSign Agreement Cloud. The DocuSign Agreement Cloud is designed to allow companies of various sizes and across various industries to make agreement, approval process, or transaction digital, from practically any device, from almost anywhere in the world.
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