DocuSign (DOCU 1.56%) is a great example of a pandemic darling that has come crashing down this year, effectively giving back all of its gains and now even trading below pre-pandemic levels. The company's electronic agreements and signatures were symbolic of the future in 2020 and 2021 as remote work was on the rise and companies were becoming more efficient and tech-savvy.

In 2022, that optimism has cooled -- drastically. Shares of DocuSign have plummeted 63% this year, making the S&P 500's decline of 18% look like a great return. However, the tech stock has been rising of late and is coming off an encouraging earnings report. Has DocuSign already bottomed out, and is now a good time to invest in the business?

Strong earnings numbers trigger a rally

On Dec. 9, shares of DocuSign jumped by as much as 17% after the company released its third-quarter numbers (for the period ending Oct. 31), which were better than expected. That's a welcome change for investors versus the 40% drop it incurred a year ago when a soft guidance sent the stock crashing. Nowadays, expectations are more modest for the business, making it less likely that there will be a big disappointment.

DocuSign's revenue in Q3 totaled $645.5 million and was up 18% year over year. Its adjusted per-share profit of $0.57 was slightly better than the $0.58 it reported in the prior-year period. While the results are encouraging, the company's growth rate has continued to fall.

Chart showing DocuSign's revenue (quarterly YoY growth) falling since mid-2021.

DOCU Revenue (Quarterly YoY Growth) data by YCharts

For the fourth quarter, the company is actually projecting its top line to decline on a quarter-over-quarter basis, with management expecting sales to be no higher than $641 million -- which would represent a year-over-year increase of just 10%. For the full year, sales will come in at just under $2.5 billion. That's a 19% increase from the previous fiscal year, when revenue was $2.1 billion.

This trend doesn't look great for DocuSign, but that doesn't mean the business will continue to decline.

There are still more growth opportunities ahead

What's encouraging about DocuSign's business is that the company has been growing its customer base over the years, particularly large enterprise and commercial customers.

Charts of DocuSign Q3 report showing growth in its customer base.

Image source: DocuSign Q3 earnings report

And there's also the potential for the company to grow its presence internationally, which still only accounts for one-quarter of its revenue.

Map showing DocuSign's international presence in over 180 countries.

Image source: DocuSign Q3 earnings report

While the business is focused on eight key markets right now, digitally, it has users in more than 180 countries. But while there is plenty of growth potential for DocuSign's business, investors shouldn't assume that means the tech stock will continue rising from here on out.

Could the stock sink lower?

One reason investors may be tempted to buy shares of DocuSign right now is that with respect to sales, the stock hasn't been much cheaper than where it's currently trading.

Chart showing DocuSign's PS ratio falling since mid-2020.

DOCU PS Ratio data by YCharts

However, there's still the possibility that DocuSign's stock could fall lower. A lack of profitability (its net losses total $132.8 million over the trailing 12 months) could cause concern for investors, especially with the economy potentially headed for a recession next year, which could hurt demand for DocuSign's products and services. For that reason, I don't think DocuSign's stock has necessarily bottomed out. And it would be dangerous to assume that it can't go lower, as in a downturn, all businesses could struggle.

But if you're willing to ride out what could be a mild recession next year, DocuSign may still make for a good investment right now. Analysts from Fortune Business Insights project that the global digital signature market will grow at a compounded annual growth rate of 36.1% until 2029, when it will be worth more than $35 billion.

Given DocuSign's long-term growth opportunities, there are plenty of reasons to remain bullish on the stock in the long run. Just don't be surprised if it dips lower next year.