Wedbush Upgrades DocuSign as Downside is Limited, Sees it as an M&A Candidate

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Wedbush analysts upgraded DocuSign (NASDAQ:DOCU) shares to Neutral from Underperform with a price target of $55.00 per share.

They note that all negative catalysts that they were expecting “have now played out,” hence the upgrade to Neutral.

“While the market for high growth tech has been brutal, DOCU shares have been under considerable pressure as the WFH growth hangover coupled by a softer macro/execution issues have been the perfect storm for the stock. That said, we believe execution on the CLM deal front have generally stabilized with numbers now attainable for FY23/FY24,” the analysts said in an upgrade note.

Moreover, they believe DocuSign could be seen as an M&A candidate if shares continue to underperform given that the company’s tech platform is an “attractive asset.”

“In our opinion, the management team has gotten its arms around the business and is clearly adjusting to the new sales environment although some growth challenges still remain heading into the rest of FY23,” the analysts concluded.