Analyst Note| Dan Romanoff, CPA |
We are raising our fair value estimate for narrow-moat DocuSign to $290 per share, from $207, based on strong results and guidance. DocuSign delivered another strong quarter, exceeding our above-consensus revenue estimates by a healthy margin. The company also provided strong guidance for the remainder of the year. It expects to continue on its path of high growth, fueled by strong user additions and upselling activity. Continued quarterly strength and continually increasing guidance gave us the confidence to sharply raise our growth and profitability forecasts. We think e-signatures and the Agreement Cloud, along with rapid international growth, are here to stay and that the financial performance is more sustainable than we were previously modelling. Still, shares have run over the last few months, and we, therefore, see the stock as fairly valued.