DocuSign has become the e-signature industry's defining brand, with ~67% market share in a category where it is replacing paper signatures as the friction removal has a very high value in both time and money.
Enterprise expansion is just taking off, as is international growth.
Increasing enterprise and large commercial customer penetration gives confidence that growth will remain high.
DocuSign is moving from the landing to expanding phase
This should be a high visibility, high growth phase as use cases expand within companies.
Growth in Europe positioned to benefit from standardisation in law. (eIDAS)
The bottom line is we think DocuSign can easily beat street revenue growth estimates of ~22% a few quarters out.
Frustratingly, there is lack of data / the market is too new to have a lot of data to analyse, the key bet is on demand for eSignature growing. Anecdotal evidence is overwhelmingly positive, but backing up some of managements claims is impossible.
Potential Upside: $85 (+65%): DCF based, fully expensing SBC. Subscription revenue grows at 30% for the next 4 years
Sensible Downside: $41 (-21%): Rapidly slowing growth, but operating margin expansion to 30%.
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