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Why DocuSign Stock Jumped 16% Friday Morning

By Anders Bylund - Mar 13, 2020 at 1:57PM

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The digital document-signing specialist crushed Wall Street's fourth-quarter estimates and hasn't seen any virus-related business slowdown so far.

What happened

Shares of DocuSign (DOCU 4.64%) rose as much as 15.9% on Friday morning, driven by a strong fourth-quarter earnings report with a side of optimistic guidance for the next reporting period. The provider of cloud-based document signing and management services retreated to a smaller gain of 6.1% at 12:40 p.m. EDT.

So what

DocuSign's fourth-quarter sales rose 38%, landing at $375 million. Adjusted earnings doubled year over year to $0.12 per diluted share. Your average Wall Street analyst would have settled for earnings of roughly $0.05 per share on revenue near $266 million. Looking ahead, DocuSign sees first-quarter revenue in the neighborhood of $282 million. Here, the current analyst consensus stops at $276 million.

A businessman sits with a stylus in hand, ready to sign a tablet computer on the table in front of him.

Image source: Getty Images.

Now what

The company held its annual customer conference as a virtual meeting on March 4 in order to avoid complications from the COVID-19 coronavirus. Other than that, DocuSign's management doesn't see much of an impact from the virus on current and near-term business prospects.

"Of course, we're watching very closely any developments with COVID," said CFO Michael Sheridan on the fourth-quarter earnings call. "We do look at our pipeline. We do look at our ability to generate opportunities. We look at our close rates. We look at all of that information. And to date, we have not yet seen any material changes in our trends."

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