Returns as of 12/08/2021
Returns as of 12/08/2021
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Five days ago, shares of e-signature company DocuSign (NASDAQ:DOCU) got shredded after an earnings report showed that its business, which was proceeding just fine in Q3, is about to take a turn for the worse in Q4.
Two days ago, famed tech investor Cathie Wood stepped up to snap up DocuSign shares amid the sell-off, helping to salvage the stock.
And today? Today, DocuSign stock is recovering even further — up 5.5% as of 10:20 a.m. ET — on news that Cathie Wood isn’t the only investor who believes DocuSign is a bargain.
Image source: Getty Images.
Our latest contestant in this game of “How Much is DocuSign Really Worth?” is none other than DocuSign CEO Daniel Springer himself. Because as StreetInsider.com reports today, Springer went shopping for cheap DocuSign shares on Tuesday, spending $5 million to acquire a total of 33,675 shares at prices ranging from $138.93 to $146.91.
While we don’t know for certain what motivated Springer to make his purchases, the logical assumption is probably the right one: Like most investors, he bought shares of DocuSign because he thinks they are undervalued and are going to go up over time.
You can of course disagree with him about that. With a market capitalization of $29 billion and negative earnings according to generally accepted accounting principles (GAAP), DocuSign isn’t the most obvious value stock on the market. Then again, DocuSign did generate $418 million in positive free cash flow over the last 12 months and, according to analyst estimates collected by S&P Global Market Intelligence, the company is on track to more than triple that figure over the next five years, generating FCF of nearly $1.4 billion in 2026.
If you think buying DocuSign for less than 21 times FCF five years from now is a good deal, then you might want to join Cathie Wood and Daniel Springer and pick up a few shares yourself.
Discounted offers are only available to new members. Stock Advisor will renew at the then current list price. Stock Advisor list price is $199 per year.
Stock Advisor launched in February of 2002. Returns as of 12/08/2021.
Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Making the world smarter, happier, and richer.
Market data powered by Xignite.
