Insider Buying

Insider Buying Report: DocuSign Inc (DOCU:US)

Printed circuit breaking out of a phone while a hologram of document and a pen is lingering over it and the logo of DocuSign is displayed on the right
DocuSign Inc
(DOCU:US)
12 months:
-34%
Activity:
Bullish
Pattern:
Large purchase from CEO
News:
Q3 results
DocuSign Inc
(DOCU:US)
12 months:
-34%
Activity:
Bullish
Pattern:
Large purchase from CEO
News:
Q3 results

Insider transactions can give investors a more complete view of activity within the world’s publicly-listed companies. No one has more information in relation to a company’s operations, and prospects, than its leaders.

In this report, we are going to highlight some interesting insider buying at Docusign Inc (DOCU:US). DocuSign is an American software company that specializes in e-signature technology. At present, it has more than one million customers and hundreds of millions of users in over 180 countries, who use its software to accelerate and automate the process of doing business. The company is listed on the NASDAQ Global Select Market and currently has a market capitalization of $30.2 billion.

DocuSign Inc: Insider Buying

Our data shows that on December 7, CEO Dan Springer bought 33,765 DOCU shares at a price of $143.95 per share for The Daniel Springer Revocable Trust. This trade cost the insider $4.8 million. He also made a smaller purchase on December 8, picking up 1,076 shares at a price of $141.26 per share.

The chart represents the price history of DocuSign Inc, highlighting important buy and sell events.

Substantial Purchase

This trading activity is worth highlighting for several reasons.

Firstly, insider purchases at DocuSign are not common. These purchases actually represent the first from an insider since the company went public in 2018.

Secondly, Mr. Springer has spent a substantial amount of money on stock after a big share price pullback. This suggests he sees considerable value in the stock after the pullback.

It’s worth noting that Mr. Springer has around 30 years of experience at hyper-growth software-as-a-service (SaaS) companies. Prior to DocuSign, he was Chairman and CEO of Reponsys, where he led the sale of the company to Oracle in 2013 for $1.6 billion. This means he is likely to have a good understanding of DocuSign’s prospects.

Q4 Guidance Miss

DocuSign’s share price fell by around 40% earlier this month after the company posted its third-quarter results.

While the results showed that the e-signature company is still growing at a healthy rate, with revenue for the period up 42% year on year to $545.5 million (above analysts’ forecast of $531 million), the market didn’t like the company’s forward guidance. Here, DocuSign forecast Q4 revenue of $557 million to $563 million, lower than analysts' estimates of $570.5 million.

As a result of this guidance miss, a number of brokers reduced their price targets for the stock. One such broker was JP Morgan, which went from $300 to $175. Another was Piper Sandler, which went from $330 to $200.

The large buy from Mr. Springer here indicates that he is still confident about the future and that he expects the stock to bounce back. Given the size of the purchase, we see it as a bullish indicator.

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