DocuSign (DOCU – Research Report), 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 $86.00 price target.
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Josh Baer has given his Hold rating due to a combination of factors affecting DocuSign’s current performance and future outlook. The company has shifted its focus from customer retention to strategic expansion deals, which has resulted in a greater-than-expected impact on early renewals and a subsequent shortfall in Q1 billings. This strategic shift is expected to cause a 1% headwind to FY26 billings, and management has adjusted their guidance to reflect this change.
Additionally, the reduction in FY26 billings guidance from 8% to 5.8% year-over-year is partly due to macroeconomic prudence and the early renewal dynamic. While the timing of renewals does not directly affect revenue recognition, the assumption of fewer bookings related to macroeconomic conditions does impact revenue. This offsets some of the favorable shifts in foreign exchange and Q1 performance, leading to a cautious outlook. As a result, Baer maintains a Hold rating, suggesting that investors may need to be patient as the company navigates these changes.
According to TipRanks, Baer is a 3-star analyst with an average return of 2.2% and a 50.81% success rate. Baer covers the Technology sector, focusing on stocks such as Coursera, Asana, and Udemy Inc.