Cautious Outlook on DocuSign: Hold Rating Maintained Amid Modest Growth and Revenue Stabilization
Needham analyst Scott Berg maintains a Hold rating on DocuSign stock due to modest growth and revenue stabilization. Despite billings exceeding expectations, growth was modest at 8%, and revenue performance slightly disappointed. Operating margin improvements were due to expense shifts, not operational changes. Significant enterprise adoption of IAM is expected by 2027. TR | OpenAI also downgraded the stock to Hold with a $71 target.
Needham analyst Scott Berg has maintained their neutral stance on DOCU stock, giving a Hold rating on November 18.
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Scott Berg’s rating is based on several factors that influenced his decision to maintain a Hold rating on DocuSign’s stock. The company’s recent financial results were generally in line with expectations, but there was a slight disappointment in revenue performance after a series of stronger quarters. Although billings exceeded expectations, this was largely due to early renewals, and the normalized growth was modest at 8%.
Additionally, while the operating margin showed improvement, this was attributed to a shift in expenses rather than a fundamental change in operations. The adoption of IAM has been better than anticipated, yet significant enterprise adoption is not expected until the second half of 2027, which is necessary to achieve the desired subscription revenue growth. Meanwhile, the core business is showing signs of stabilization, with net revenue retention improving, but these factors combined suggest a cautious outlook, justifying the Hold rating.
In another report released on November 18, TR | OpenAI – 4o also downgraded the stock to a Hold with a $71.00 price target.
