DocuSign Stock Crashes Brutally as Wall Street Puts It in the ‘Penalty Box’

DocuSign shares (DOCU) collapsed nearly 19% on Friday, closing at $75.28, after the company’s first-quarter results broke what had been a promising run of recovery. The report came with a sting: lower-than-expected billings growth and a cut to full-year guidance.

Management blamed a change in sales compensation, which they said led to fewer early renewals than anticipated — a shift they framed as temporary. But not everyone is buying it.

Analysts Question DocuSign’s GTM Strategy and Broader Weakness

J.P. Morgan analyst Mark Murphy didn’t hold back. In a research note, he wrote, “Overall, we believe Docusign shares will likely be in the penalty box for now.” Murphy admitted, “We may have underestimated the company’s go-to-market changes made in the quarter as the Q1 miss does not appear to be macro related.” He maintained a Neutral rating but cut his price target to $77 from $81.

UBS analyst Karl Keirstead also flagged skepticism. He wrote, “We’re [less than] 100% confident in DocuSign’s explanation and remain Neutral-rated.” Keirstead questioned whether deeper issues could be at play, including economic uncertainty, sales execution, or the company chasing fewer but larger deals.

Candidly, we’re unsure of the root cause but conclude that a -17% correction more than adequately prices in the added…risk, Keirstead added, while slashing his price target to $80 from $85.

DOCU’s Revenue Beats But Forecast Cuts Overshadow Results

Despite the market punishment, DocuSign beat expectations on both EPS and revenue. The company posted adjusted earnings of 90 cents per share, handily topping the 81 cents expected by analysts. Revenue grew 7.6% to $763.7 million, above estimates of $748 million.

Still, billings came in at $739.6 million, narrowly missing the forecasted range of $741 million–$751 million — a signal that weighed heavily in the stock’s brutal reaction.

DocuSign’s Guidance Cuts Add to the Market’s Gloom

DocuSign’s full-year billing forecast was trimmed to $3.3 billion, down from the previous range that extended as high as $3.4 billion. Fiscal 2026 revenue guidance now sits between $3.15 billion and $3.16 billion, just slightly above earlier expectations.

Even with the rough quarter, the board authorized an additional $1 billion share buyback — a move that may signal confidence but wasn’t enough to offset concerns.

Is DocuSign a Buy, Sell, or Hold?

Despite the stock’s steep drop, Wall Street is not hitting the panic button — at least not yet. According to data from the past three months, 17 analysts currently cover DocuSign, and the consensus rating remains a Hold, with four Buy ratings, 12 Holds, and just one Sell.

The average 12-month DOCU price target sits at $89.29, implying an 18.6% upside from Friday’s close at $75.28. But opinions vary widely: the highest target is $124, while the lowest dips to $67, suggesting real uncertainty over where the stock goes next.

See more DOCU analyst ratings