You must know this space intimately and for good reason.
Feed me.
No. My wife only lets us cuddle.
(blews out)
To start, I'm a fan of nouns that become verbs. It doesn't have to be ubiquitous, as long as it happens in the right corners of the world. When people around my office started saying, "Docusign it", that got my attention. I started following the company and the stock, eventually buying at price points I liked.
My expectation was that this was going to be a very long term play. They were growing revenue 30+%, and they have 70% of the Esignature market, which is only going to grow. And then Covid hit. Very long-term accelerated into, "Oh, ####, do I hang onto this?" Sure, the smart play would have been to sell at $290 and buy back sub-$200 (The pop to $290 didn't even happen because of their earnings, amusingly, but was a reaction to ZM earnings iirc).
But along the way, I've been listening to earnings calls, watching management, listening to what they're doing, etc. I want to own this company long-term. What's reinforced my belief and expectations is that they're no longer just an esignature company. They're a contract/document lifecycle company. And they're very sticky. Once you have a contract process and repository that's working inside a large corporation, how likely are you to leave it to transition to something else (see 125% NRR posted above)?
They also purchased a small company with (what seems like) a fantastic AI tool that reviews contracts and flags terms, conditions, phrases, etc for further review, exceptions to policy, etc. It's supposed to save substantial time ($$) in legal review. This is in its infant stages. I'm curious to see how this plays out for them in reality. I love the idea of it, but can they make money off of it?
So, I've been watching through Covid. I like their management team. They're taking the AMZN approach. They don't care if people don't like that they're losing money right now. They could be profitable, but they're reinvesting into the business, this quarter be damned. And coming out of Covid, when the stay-at-home stocks are supposed to start floundering,
revenue growth is continuing to accelerate. That won't last forever, but I'll wait and see how it plays out.
Finally, I default back to what I said to BnB. My basis is low. It's easy for me to watch and wait. If this dumps 25%, I'm still OK. For people looking at it today,
DOCU is NOT cheap. But I still think there's money to be made, even if it doesn't come in the form of
tl; dr