DOCU - DocuSign: New Growth Opportunities Globally - $50B TAM Ahead

2024-04-11 14:00:00 ET

Summary

• DocuSign has recovered by +49% since the October 2023 bottom, well outperforming the wider market at +24.9%, further underscoring the stock's immense bullish support thus far.
• The sticky consumer base is also observed in its expanding gross margins, remaining performance obligations, and promising FY2025 financial guidance.
• DocuSign's strategic partnerships with Microsoft Azure and WhatsApp are driving sales and growth in global markets, despite the normalization from the hyper-pandemic period.
• Combined with the $50B in untapped TAM, the sustained cost optimizations, and healthy balance sheet, we believe in the management's ability to deliver profitable growth ahead.
• There remains great opportunities for investors looking to add at dips.

We previously covered DocuSign, Inc. ( DOCU ) in January 2024, discussing the unlikely buyout rumor with the recent lifting market sentiments already triggering the stock's overly rapid recovery, with the potential volatility offering interested investors a minimal margin of safety.

While the stock had been rated as a Buy then, attributed to its speculative turnaround story, we had also recommended a lower entry point at the $48s for improved upside potential....

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