DocuSign has announced its third-quarter earnings report for 2022 and the company quite comfortably outperformed the key metrics to post a profitable quarterly earnings call. But despite a decent performance, the company’s stock got hammered right and left due to the uncertainty over the upcoming quarter’s earning numbers as informed by DocuSign.
Let’s look at the performance metrics of DocuSign in this earnings report, but before that down below is a must-read intro about the company.
Wikipedia snippet about DocuSign: DocuSign, Inc. is an American company headquartered in San Francisco, California, that allows organizations to manage electronic agreements. As part of the DocuSign Agreement Cloud, DocuSign offers eSignature, a way to sign electronically on different devices. DocuSign has over 1 million customers and hundreds of millions of users in more than 180 countries. Signatures processed by DocuSign are compliant with the US ESIGN Act and the European Union’s eIDAS regulation, including EU Advanced and EU, Qualified Signatures. End of the snippet.
Now, coming back to the topic of this blog post, here are the numbers.
Revenue: DocuSign generated a hefty quarterly revenue of $545.5 million U.S. dollars against the expectation of $531 million by wall street investors and analysts. Beating the revenue metric in my opinion is always a good thing for almost any company and it's good that DocuSign did that with a good enough margin.
Earnings per share: The company made 58 cents of earnings per share in comparison with 46 cents per share prediction by the Refinitiv analysts. The margin of difference in this metric is also decent enough for the future year-over-year quarterly earnings calls.
And, after all of this, this is how the stock performance of the company looks like.
As you can see the investors are extremely unhappy about the company’s announcement of the upcoming quarter's possible earnings miss. As a result, they see an opportunity to sell and end their positions in the retail market.
In my opinion, I consider this to be an immature move from the investors of DocuSign stock since the possible future earnings miss seems to be a temporary hurdle in comparison with the company’s ability to grow beyond that.
It’s not like DocuSign is going to go bankrupt or something because of one earnings miss. So the investors need to understand that and take much longer holding positions by asking themselves why they in the first place decided to invest in DocuSign.
Asking that question would help them to believe in the company’s future prospects instead of worrying about a bumpy quarterly performance.
Thank you for reading this, and God Bless Everyone.
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