Any thoughts?
Their revenue growth is decelerating pretty quickly to the 30% range.
I don’t like that half their board and ceo left about the time they went public.
Plus, I think they will have a hard time competing against adobe in enterprise. I think their area of expertise is business to consumer (realtors, lawyers, doctors, etc). I am not sure how heavily penetrated they are here and how much room they have to grow. For example are there lawyers who don’t already use them?
2 Likes
I just used them to buy a new car with my bank. Was very easy to complete the document signing. I haven’t looked at the company or the stock.
Andy
2 Likes
I used them a year+ ago for a mortgage refi. I found it pretty inelegant and not pretty, but otherwise very convenient (I never went anywhere but my upstairs office to sign any paperwork for the refi until the final closing). I do think Adobe or someone else will trounce those capabilities… but wouldn’t rule out their survival. Often, banks latch on to something and keep it alive for a long, long time even if it isn’t best of breed, and that seems to be one of their current largest customer segments.
2 Likes
Thanks all. I am familiar with their usage but not sure about growth. Need to do more research. The price is close to the IPO time and obviously for a reason.
I recently started taking a look at them especially at these prices. For me it would probably be more of a small speculative position. Through some preliminary research I found a few things.
Estimated market share is 70%.
GAAP gross margins are 78%
They added 25K new customers in Q2.
83% of its revenue is from the US. The other 17% from English speaking countries ie UK, Canada, AUS. Growth potential would be in the EU and Japan. Whether they can execute is another question.
They have 200 customers with an annual contract value (ACV) of $300K. Other ACV’s are above $10M. That includes the likes of SalesForce.com, Comcast, Expedia. About 300,000 companies currently use the software. Seems like a pretty diversified customer base.
Oracle, IBM, and Microsoft were all interested in acquiring DOCU in the past. Supposedly the Microsoft offer was around $4B. Long term they might be more of a takeout candidate for Adobe or Google. Who knows. Pure speculation.
I’m not quite sold on DOCU yet. Seems like a highly competitive market where pricing power could erode over time. Do they have a sustainable moat? Still lots of questions.
2 Likes
I am not sure how Expedia uses them but again Comcast and expedia are business to consumer. But that does suggest the b2c segment could be pretty large. It just doesn’t eeem like for example GE Aviation sending a Docusing to Boeing for a jet engine order. That would open a lot of doors. B2b sales.
I could overlook that if it weren’t for the slowing growth and the turnover as they go public.
According to this article the total available market is $25 billion. I am not sure hue they come up with that number. But any time you have a business dealing directly with consumers thet requires a signature, that had to be a big market.
https://finance.yahoo.com/news/does-docusign-moat-202900882…
They ar also embedded in many products used today, which creates stickiness and a moat
To me the big threat is adobe.
Many businesses use adobe acrobat for pdf documents and a user of acrobat can get the professional grade and sign documents electronically and send them back. A lot of b2b documents can be signed this way.
With DocuSign they do the complete opposite. It is the person sending the document requiring signature that must prep the document and pay for the software.
I would say their major threat is adobe as they control software a lot of business is done on, the pdf document.
1 Like
To me the big threat is adobe.
Why you think the market cannot support two players? Assuming there is $25B TAM, don’t you think both companies have a long runway?
1 Like
Hi hlygrail,
Maybe because the financing for a car is not as involved, might be why I liked it. When i used it everyplace I had to initial was highlighted and everything I had to sign was highlighted. They gave me a electronic signature that I could accept and then it put me to every box and I just hit yes. It was all done on my phone so was very easy.
Andy
1 Like
Who is dotloop? Is this docu or a competitor?
How much of that $25 billion tam is b2b? Where adobe has a stronghold? How much are they counting on tapping that market to fuel their growth? That is my concern. Or is that number only b2c where docu seems to florish. Docu would make a great acquisition target for adobe.
You all are aware that Adobe bought EchoSign back in 2011, right? You can see what EchoSign became here: https://acrobat.adobe.com/us/en/sign.html
I don’t know if this site is legit: https://www.consumersadvocate.org/digital-signature/compare/… , but it summarizes the differences as:
Adobe EchoSign Digital Signature Software has a higher overall rating than DocuSign Digital Signature Software. Adobe EchoSign scores better than DocuSign across: Security, Pricing, and Platform. However, DocuSign scores better on Ease of Use. Both companies score similarly on Features.
Anyway, Docusign has been around for 15 years. I think that if it was going to take off and grow the way this board demands, it would have happened already.
4 Likes