DocuSign shares are currently trading at $47.07 a share. There was a breakout from the descending trend and the stock may have found some stability.

Overview

DocuSign, Inc. is an American business with its main office in San Francisco, California, and it enables businesses to manage electronic contracts. DocuSign provides eSignature, a mechanism to sign electronically on various devices, as a feature of the DocuSign Agreement Cloud.

Financials

Looking at the financial year that ended on the 31^st of March 2022 versus 2021. In 2022 revenue for the year went up to $2.1bn from $1.45bn and gross profit went up to $1.6bn from $1.1bn. EBITDA rose by $145m to $169m but net income still came in at a negative value of $-69.9m. Although the company has managed to improve this and edge closer towards a positive income as last year it reported $-243m. Nevertheless, the earnings per share still came in at a loss of $-0.36 but down from $1.31 in the prior year. Furthermore, total liabilities increased by $255m but total assets only rose by £205m within the year. This was primarily due to the rise in current liabilities. As a result of this, shareholder equity in 2022 fell to $275m from $325m in 2021.

Technicals

From a technical aspect, the stock’s shares are currently trading at $47.07 a share. On Friday the 11^th of November we can see that there was a breakout from the descending trend (green candlestick above yellow trendline), and the stock may have found some stability. Towards the upside, resistance sits at $47.86 then at $48.52 then at $50.25. A break above these levels could see the share price climb higher towards the $54.32 price, where resistance held out on the 15^th of November. However, towards the downside, support sits at $46.05 then at $44.79 then at $43.28. A break below these points may see the share price slide back down towards the major support at $43.97 (corresponds with the yellow dotted trendline). Looking at the indicators, RSI reads 50 suggesting neutral and MACD is also neutral.

Summary

On the basis of the financials of DocuSign, revenue and gross profit continue to grow which is good. However, the company is still reporting a negative net income, and the value of equity fell as liabilities outweighed assets in 2022. The company has managed to reduce some of the losses year-on-year, but still has a long way to go in order to see real progress. Its due to report quarterly earnings tomorrow and a positive report may cause short-term upside, nonetheless, the long-term outlook is bearish unless it shows greater financial improvements over the next couple years. Looking at the technicals, support seems to be established due to the breakout and as mentioned above, short-term highs may occur. But that is very much dependent on the earnings, as a negative report could see the price heading in the opposite direction.