DocuSign’s stock is trading much below its recent highs

DocuSign Inc. (DOCU), a software business that produces electronic signature and verification systems, is now trading more than 70% below its 52-week highs. Investors are likely to feel that the company’s finest days are passed, along with the pandemic’s most severe stages. Wedbush Bank, in particular, does not expect DocuSign to develop much in the next few quarters.

Wedbush analysts downgraded DocuSign’s stock from “neutral” to “below market” on Tuesday, May 3, and decreased the target price from $80 to $60. According to the experts, DocuSign’s rapid rise has been forgotten. The firm benefited from remote work since revenues increased by 49 percent in 2020 and 45 percent in 2021, respectively. DocuSign’s growth rate will slow down a lot now that demand for its services has stabilized and office work is back to normal.

That is, experts anticipate DocuSign to continue expanding, but it is unlikely that the hyper-growth of recent years will be repeated. DocuSign’s stock is presently priced at about 38 times its free cash flow, according to S&P Global Market Intelligence. According to this evaluation, investors would want to see DocuSign expand by at least 38 percent every year. Wall Street experts, on the other hand, expect the corporation to expand at a rate of 22% every year. At the same time, we cannot rule out the possibility of faster digital transformation, which will be able to keep DocuSign solutions popular regardless of the epidemic. However, although DocuSign’s stock is now under pressure.