Paul Harris, CFA Docusign DOCU-Q BUY Jul 21, 2020

Likes and uses its software, but it's still too close to its post-Covid hangover to buy. There are too many competitors, too.

Has a new CEO since last year and he's aggressively cut costs. Last month, they reported one of their best quarters in years, but shares didn't get any traction.

Dominates this business, but ADBE has entered the space. Stock's gone sideways. Software is not unique, and competition will show up. Perhaps a bigger player like MSFT would buy it and incorporate the technology.

It has maxed out to a large degree on the growth side. It is still dominant in the space and could be an acquisition target.

Their Q2 earnings beat. A pandemic darling that then crashed. But now it trades at a fair valuation and strong free cash flow. She bought it last September is up 35%. Trades at 16x PE and has a 8% free cash flow yield. Great managers who underpromise, so they will beat their quarter. Has real secular growth.

Decent earnings lie ahead. Has a 5.5% free cash flow yield.

Their last quarter was good but nobody liked it. Innovations were good. That said, go with the flow and sell.

We have long thought someone should take over DOCU. While there is competition and not really a 'moat' anymore, it still has a solid 'brand'. Growth is slowing, but cash flow is solid and growing. It is 21X earnings right now, down 15% for the year but of course well off its pandemic highs. Its low is just below $50. We would likely get more interested in the $65 range. 
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