3 Red Flags for DocuSign's Future
DocuSign's (NASDAQ: DOCU) stock plunged nearly 80% over the past 12 months. The e-signature services leader was once beloved by growth investors during the pandemic, but it quickly lost its luster in a post-lockdown world as its revenue growth cooled off and its losses widened.
At its all-time high of $310.05 last September, DocuSign's stock traded at 33 times the revenue it would generate in fiscal 2022, which ended this January. That nosebleed price-to-sales ratio was impossible to sustain as rising rates drove investors away from frothier growth stocks, but DocuSign's stock now looks significantly cheaper at less than five times this year's sales.
But before investors consider DocuSign to be a viable turnaround play, they should be aware of three red flags which indicate its sell-off isn't over yet.
Source Fool.com
