Elias Stein
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Buying the dip only works if a stock gets off the floor. Happily for
DocuSign
and its investors, a recent brutal stock selloff now looks like, well, a dip, not a death blow. Shares of the e-signature company, which thrived with most of America working at home last year, cratered 42% on Dec. 3, after earnings that Citigroup analysts described as “one of the biggest [software-as-a-service] whiffs in recent memory.”
DocuSign CEO Dan Springer noted to Barron’s that the company had said for multiple quarters that the Covid-era lift in its business would slow, but its guidance failed to catch the billings deceleration. Springer said the slowdown was concentrated in the U.S.—growth was better in Europe and Asia—and in strong pandemic sectors, including financial services, healthcare, and technology.
He added that some customers accelerated demand during the pandemic, in effect stockpiling digital signature capacity, but that consumption has returned to a more normal level. “We’d never been through a pandemic, so our forecasting was not everything you’d want it to be,” he said.
The rout drew bargain-hunters. One was Cathie Wood, whose
ARK Innovation
exchange-traded fund has had its own woes of late. Three ARK ETFs—ARK Innovation,
ARK Next Generation Internet,
and
ARK Fintech Innovation
—bought nearly 747,000 DocuSign shares on Dec. 3 for a little over $100 million, according to trades posted by the ETFs. By Monday, the stock was up 5.7%.
On Wednesday, the shares soared 11.4%. This time, the buyer was Springer, who snapped up $4.8 million in shares. By Friday, the stock was at $144.48, up 7% on the week, well short of the $234 before the rout. It’s a start.
Next Week
Monday 12/13
J.Jill
and
PHX Minerals
host earnings conference calls.
Tuesday 12/14
Campbell Soup
,
Barnes Group, and
Avaya Holdings
host investor days.
The Bureau of Labor Statistics releases the producer price index for November. Consensus estimate is for a 0.55% month-over-month rise, and for the core PPI, which excludes food and energy, to gain 0.4%. This compares with increases of 0.6% and 0.4%, respectively, in October.
The National Federation of Independent Businesses reports its index, which surveys about 5,000 small-business owners across the country, for November. Expectations call for a reading of 98.3, compared with 98.2 in October.
Wednesday 12/15
The Federal Open Market Committee concludes its two-day meeting, when policy makers will discuss accelerating the timetable for tapering monthly securities purchases.
The BLS reports export and import price data for November. Expectations are for a 0.5% month-over-month rise in export prices, while import prices are seen increasing 0.5%. This compares with gains of 1.5% and 1.2%, respectively, in October.
The National Association of Home Builders releases its NAHB/Wells Fargo Housing Market Index for December. Consensus estimate is for an 84 reading, compared with an 83 reading in November. The index peaked at 90 late last year, and home builders remain bullish on the housing market.
The Census Bureau reports on retail-sales spending for November. Expectations are for a seasonally adjusted 0.7% month-over-month increase in retail sales, compared with a 1.7% rise in October. Excluding autos, spending is seen rising 0.8%, compared with 1.7% in the previous period.
Thursday 12/16
Heico
,
Lennar
,
Accenture
,
FedEx
,
Jabil,
Adobe
,
Rivian Automotive, and Nordson are among companies hosting earnings conference calls.
The Census Bureau releases its New Residential Construction report for November. The seasonally adjusted annual rate of housing starts is expected to be 1.563 million units, compared with 1.52 million in October. A housing start is counted when excavation begins on a home. Permits issued for new-home construction are expected to be 1.655 million, compared with 1.653 million in October.
The Bank of England announces its interest-rate decision and publishes the minutes of the meeting.
The Federal Reserve releases industrial production data for November. Economists are looking for a 0.6% rise, after a 1.6% increase in October. Capacity utilization is expected at 76.8, roughly in line with October’s 76.4%.
Friday 12/17
Steelcase
,
Darden Restaurants
,
and
Quanex Building Products
host earnings conference calls.
Write to Eric J. Savitz at eric.savitz@barrons.com