DocuSign, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Josh Baer from Morgan Stanley maintained a Hold rating on the stock and has a $90.00 price target.
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Josh Baer has given his Hold rating due to a combination of factors that present both opportunities and challenges for DocuSign. The company reported a strong quarter with better-than-expected results, including increased billings and revenue. However, the positive impact of these results is tempered by concerns such as the contribution of early renewals to billings growth, a softer guidance for Q4 subscription revenue, and limited margin expansion.
Additionally, there is a lack of transparency regarding the economics of their IAM segment, and the unchanged dollar net retention rate suggests that IAM deals have not yet significantly boosted growth. While the trailing twelve-month billings are accelerating, and estimates are moving higher, these factors do not strongly support a significant re-rating of the stock. Therefore, Baer maintains a Hold rating, acknowledging the solid execution but also recognizing the need for more evidence of sustained growth to drive a more positive outlook.
According to TipRanks, Baer is a 3-star analyst with an average return of 2.3% and a 47.76% success rate. Baer covers the Technology sector, focusing on stocks such as ServiceTitan, Inc. Class A, Box, and DocuSign.