- DocuSign, Inc DOCUMENTARY announced a board-approved reduction in force of about 9% of its workforce yesterday.
- Needham Analyst Scott Berg reiterated a hold on the stock.
- He believes the transition right-sizes Docusign’s operations for near-term growth, which he expects to remain well below pandemic levels.
- However, he found the timing a little interesting given that newly announced CEO Allan Thygesen has yet to start.
- The analyst believed the new CEO would fully consult and approve the plan as he would be critical of its execution.
- Although management provided few details, it expects most of the reduction will not impact any customer-facing or customer success functions.
- The analyst hasn’t updated his model at this time, but believes the RIF will reduce operating costs by 4% to 5%, which translates to annual savings of $80 million to $100 million, or $0.39 to $0.48 per share in EPS once fully implemented.
- RBC capital Analyst Rishi Jaluria lowered the price target on DocuSign to $55 from $65 while maintaining a sector perform.
- DocuSign’s restructuring plan is “slightly negative,” though it gives investors some comfort on margins and supports management’s comment on earnings talks, which DocuSign has adopted during the pandemic.
- However, he is “more cautious” about DocuSign’s near-term future as the cost reduction comes despite the sales organization’s high churn rate.
- Price promotion: DOCU shares traded 0.99% lower at $54.76 on the last check Thursday.
© 2022 Benzinga.de. Benzinga does not provide investment advice. All rights reserved.
