Negative: DocuSign falls 17% after disappointing fiscal outlook, concerns include slowing growth and declining margins.

From Yahoo Finance: 2025-06-09 14:22:00

Deep Value Returns shares a bearish thesis on DocuSign, Inc. (DOCU), pointing out that the stock fell nearly 17% following a disappointing fiscal 2026 outlook. Concerns include slowing growth, declining free cash flow margins, and eroding operating leverage.

Despite having a strong balance sheet with no debt, DOCU’s revised guidance and decreased free cash flow margins have led to a downward revision of full-year margin expectations. The stock is no longer viewed as attractive due to its valuation and marginal growth prospects. The author has closed their position due to these concerns.

DocuSign, Inc. (DOCU) is not among the 30 Most Popular Stocks Among Hedge Funds, with 41 hedge fund portfolios holding the stock at the end of the first quarter. While acknowledging DOCU’s potential, the author believes other AI stocks offer better growth prospects. Check out their free report on the best short-term AI stock.

Read more: DocuSign, Inc. (DOCU): A Bear Case Theory