More than a lockdown buy: The long-term potential of DocuSign

As we’ve covered before, a number of stocks have been able to thrive during Covid-19. Even though the pandemic poses an unprecedented challenge to the global economy, some sectors (such as technologies that allow people to work from home) have fared extremely well.

DocuSign is one such example and allows businesses to digitally prepare and sign documents. It only listed back in 2017 but was extremely well-placed for Covid-19, helping businesses stay operational by ensuring important documentation could be signed and processed remotely.

Listed on the NASDAQ, DocuSign shares moved upward after lockdown measures were introduced around the world. On March 12 the share price was trading around $68. By June 26 however, DocuSign shares were trading at $177.

However, since then shares have corrected by around 5% and on June 29 their price had slipped to $168. This was ironically as a result of good news, with the data from around the world showing Covid-19 was starting to fully recede. Lower death rates and falls in infection levels may be welcomed by some, but investors in DocuSign were wary – would this also mean the end to DocuSign’s share price gains?

Maybe not.

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In the context of investing in companies like DocuSign, which have experienced greater usage during lockdown, that Covid-19 is still very much a threat turns out to be good news. Amid new outbreaks and continued warnings from government, lockdowns and social distancing measures could simply be a part of everyday life now. Therefore, for the time-being it’s likely there will still be a remote-working demand for solutions like DocuSign.

The past few months have also made many businesses realise how cost effective and practical remote working can be. This is encouraging for stocks like DocuSign, that their success isn’t just reliant on there being a lockdown in place. Instead, they are well-placed for a potentially much more long-term and seismic trend – a new age of working from home!

DocuSign has flourished during this crisis, having achieved 39% year-on-year growth in Q1 with total revenue of $297m. With millions of users around the world, DocuSign’s solutions are used by many of the top firms in the global technology, financial services and pharmaceutical sectors.

No returns are guaranteed but, when creating a portfolio with companies that can grow in an uncertain and constantly-changing environment, stocks like DocuSign will attract a lot of attention from many forward-looking investors.

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