[Click eStock] "DocuSign, Demand Slowdown More Pronounced Than Expected... Stock Volatility Inevitable for Now"

[Asia Economy Reporter Jihwan Park] Hana Financial Investment forecasted on the 7th that DocuSign's stock price will experience increased volatility for the time being, as the slowdown in demand is more pronounced than expected.

Jaeim Kim, a researcher at Hana Financial Investment, said, "After the Q3 (October fiscal year-end) earnings announcement, DocuSign's stock price plummeted by 42%," adding, "Billings, an indicator reflecting new contract signings and renewals by existing customers, fell short of expectations starting in Q3, and the Q4 key performance indicator guidance also missed market expectations."

In particular, the CEO's comments that the pace of customer demand slowdown observed from Q3 is progressing much faster than expected and that customers' purchasing patterns have begun to change significantly from before have further heightened investor anxiety.

Before the sentiment shift, an analysis suggests that stock price volatility will be high. Researcher Kim Jaeim said, "The Q4 Billings guidance is projected at $647 million to $659 million, indicating slower growth compared to the pre-COVID period," adding, "After steep growth over the past year and a half, there will likely be an impact from a high base and a return to existing corporate purchasing trends for the time being."

For companies that benefited greatly from the untact trend, once the benefit effect starts to diminish, investor caution is considerable, and until earnings overcome the negative base effect and stabilize again, stock price volatility remains quite high. This judgment also applies to DocuSign. Researcher Kim said, "For untact beneficiary stocks to have a clear turnaround in stock prices, a sentiment change is necessary," emphasizing, "Until earnings demonstrate a solid demand trend, high volatility due to caution is expected."