DocuSign (DOCU) shares crumbled Friday after the after the online signature vending group posted weaker-than-expected first quarter earnings and forecast muted revenue growth for the remainder of the year.
DocuSign, which has been struggling to hold investor interest as pandemic-era restrictions bring more and more professionals back to the office, earned 38 cents per share over the three months ending in April, missing Street forecasts by around 8 cents on a non-GAAP basis.
First quarter revenues were solid at $588.7 million, but the group held to its full-year estimate of sales in the region of $2.47 billion to $2.48 billion. The group also lowered its billings forecast to between $2.52 billion and $2.54 billion from its previous estimate of $2.71 billion to $2.73 billion.
"We are confident in our long-term opportunity and in our ability to add new customers and power their digital transformation," CFO Cynthia Gaylor told investors on a conference call late Thursday. "However, we are not immune to the macro challenges with our customers and peer space."
"While we have made considerable progress bringing in leaders with significant experience at scale, it's important to recognize that meaningful traction and better visibility will take multiple quarters," she added.
DocuSign shares were marked 23% lower in early Friday trading to change hands at $67.23 each, a move that would extend the stock's year-to-date decline to around 57.7%.
Earlier this week, the group also unveiled an expanded partnership with Microsoft (MSFT) which will see the tech giant using DocuSign's products and services in its contract management workflows.
"DocuSign continues to struggle with its post-pandemic hangover and saw very elevated turnover in its sales force in F1Q, setting back its demand generation efforts, but despite these challenges, we continue to like DocuSign for long-term capital appreciation," JMP Securities analyst Patrick Walravens, who carries a 'market outperform' rating on the stock, but lowered his price target by $29, to $151 per share, following last night's earnings.
"DocuSign remains the clear leader in e-signature and is well positioned for a broader system of agreement, which together are a $50 billion market opportunity," he added. "The company also has strong leadership in CEO Dan Springer and COO Scott Olrich, who have worked through these kinds of issues before."
