FTSE 100: Index falls as earnings results weigh; pound below $1.33, Bodycote soars
Friday - UBS has revised the price target for Docusign Inc. (NASDAQ: DOCU) shares, lowering it to $90 from the previous $100, while keeping a Neutral stock rating. Currently trading at $85.94, DocuSign maintains a "GREAT" overall financial health score according to InvestingPro analysis. The adjustment follows Docusign’s recent financial performance and guidance for the upcoming fiscal year.
Karl Keirstead, an analyst at UBS, noted that Docusign’s third-quarter earnings, which ended in October, showcased a billings growth of 9%. The company also indicated a slight improvement in demand and expressed confidence in achieving a growth rate of over 10%, although no specific timeline was provided for this target. With impressive gross profit margins of 79.12% and strong revenue of $2.98 billion in the last twelve months, DocuSign demonstrates solid operational efficiency. Based on these factors, UBS had increased its revenue growth estimate for fiscal year 2026, which aligns with the calendar year 2025, to 7%.
Despite these positive signs, Docusign’s initial revenue guidance for FY26 was set at just 5%, or 6% on a constant currency basis. This forecast is a decrease from the 8% growth rate reported for FY25. According to Keirstead, this projection appears conservative, particularly in light of Docusign’s strong performance in the fourth quarter, which ended in January.
The valuation of Docusign shares at 18 times the updated free cash flow estimates for CY25/FY26 reflects UBS’s neutral perspective on the stock’s future performance. The firm’s stance is influenced by the company’s latest guidance, which seems cautious despite recent achievements and the absence of a definitive timeline for returning to double-digit growth rates.
In other recent news, DocuSign Inc (NASDAQ:DOCU). reported strong fourth-quarter results, surpassing guidance expectations in both revenue and billings. The company experienced a 9% growth in subscription revenue, with billings growing by 11% year-over-year, exceeding the anticipated 5% growth. Analysts from William Blair, Wells Fargo (NYSE:WFC), Evercore ISI, Piper Sandler, and Morgan Stanley (NYSE:MS) have provided varied ratings and price targets, reflecting differing perspectives on the company’s future. William Blair maintained a Market Perform rating, while Wells Fargo reiterated an Underweight rating with a $73 target, citing challenges in achieving growth acceleration. Evercore ISI initiated coverage with an In Line rating and a $100 target, acknowledging DocuSign’s solid fiscal year 2025 performance. Piper Sandler maintained a Neutral rating with a $90 target, noting the company’s strong fourth-quarter performance but expressing caution due to macroeconomic uncertainties. Morgan Stanley reaffirmed an Equalweight rating with a $97 target, highlighting the promising progress in DocuSign’s Identity Access Management (IAM) segment. DocuSign’s fiscal year 2026 guidance projects a 5-6% total revenue growth and a 6-7% billings growth, with IAM expected to significantly contribute to future revenue.
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