On Wednesday, Citi reaffirmed its positive stance on Docusign Inc. (NASDAQ:DOCU), maintaining a Buy rating and a $93.00 price target for the company's stock. The endorsement follows a virtual non-deal roadshow with Docusign's CFO, Blake Grayson, where the company's future growth and margin prospects, as well as its immediate priorities, were discussed.
Docusign aims to achieve double-digit revenue growth following a series of changes in leadership and go-to-market strategies. The fourth quarter showed promising signs of stabilization, including improved usage trends, a rebound in the real estate vertical, and a leveling off in the gross dollar retention rate.
The upcoming Momentum conference in April is anticipated to serve as a platform for new product announcements, potentially expanding Docusign's growth drivers beyond its core e-signature solutions.
The company also sees opportunities to improve margins, even after a recent reduction in force, by embracing product-led growth strategies and increasing automation to keep operating expense growth to a minimum.
Citi's continued endorsement of Docusign comes with a high-risk caveat but is based on the expectation of revenue re-acceleration and the potential for structurally higher margins compared to peers with lower growth trajectories.
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