DocuSign Looks Like A Good Bet Under $50
Summary
The company is growing revenue at a 30%+ rate and recently doubled its addressable market to $50 billion with the introduction of solutions that complement its core eSignature software and strengthen its value proposition. The companys valuation has compressed due to revenue and billings growth deceleration in Q1 and general economic fears. In the SaaS world, the conventional thinking is that companies ideally want a dollar net retention rate of at least 100%, which would indicate month-over-month revenue growth from its existing client base. DocuSign has several competitors in the electronic signature market, including Adobe (ADBE), which is a $140 billion beast focused on multimedia and creativity software. I have initiated a small position in DocuSign under the belief that the companys strong growth will continue for the foreseeable future given its brand advantage and expanded suite of solutions.
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