[Overseas Stocks Spotlight] "DocuSign, an Unstoppable Trend in Electronic Signature Activation"

[Asia Economy Reporter Eunmo Koo] Samsung Securities analyzed that the activation of electronic signatures, such as DocuSign (DOCU US), is already an unstoppable trend, and short-term stock price adjustments could present attractive entry opportunities.

DocuSign's revenue for the second quarter of fiscal year 2021 increased by 45.2% year-over-year to $342 million, surpassing the consensus estimate of $319 million. The GAAP-based earnings per share (EPS) was -$0.35, below the market consensus of -$0.28, but excluding one-time factors such as $68 million in stock compensation expenses and $7.4 million in acquisition-related intangible asset amortization, the non-GAAP EPS was $0.17, significantly exceeding the consensus of $0.08.

The annual revenue guidance was raised to $1.384 billion to $1.388 billion, exceeding both the consensus estimate of $1.32 billion and the previous guidance of $1.313 billion to $1.317 billion. The annual backlog guidance was also raised from $1.515 billion to $1.535 billion to $1.623 billion to $1.643 billion, and the third-quarter guidance of $358 million to $362 million exceeded the consensus of $335 million.

Attention should be paid to the acceleration of revenue growth. On the 6th, Samsung Securities analyst Joonghan Kim stated in a report, “Based on the upper end of the guidance, the third-quarter revenue growth rate is 47.5%, which is steeper compared to 38.8% in the first quarter and 45.2% in the second quarter,” adding, “The second-quarter backlog (Billing) also increased by 61% year-over-year, maintaining a continuous upward trend, which proves that the activation of electronic signatures is not a temporary fad but an irreversible change.”

DocuSign’s 12-month forward price-to-sales ratio (PSR) is around 34 times, trading at a premium compared to the median of 31 times among peer groups with similar expected revenue growth. Analyst Kim pointed out, “It is necessary to be cautious as the impact could be significant if macro volatility expands due to multiple increases across the untact (contactless) sector.” However, he forecasted, “The mega trend of electronic signatures is already an unstoppable flow, and short-term stock price adjustments due to external factors will be attractive entry opportunities.”

This content was produced with the assistance of AI translation services.