Why DocuSign, Inc. (DOCU) Crashed On Friday
DocuSign dropped its share prices by 18.97 percent on Friday to end at $75.28 apiece after slashing its full-year billing outlook amidst its shift to an artificial intelligence model.
For the full year period, DocuSign, Inc. (NASDAQ:DOCU) now expects billings to settle in the range of $3.285 billion to $3.339 billion, down from its previous outlook of $3.30 billion to $3.354 billion.
A software engineer in front of a computer screen, typing code to build the company's electronic signature software.
According to DocuSign, Inc. (NASDAQ:DOCU) CEO Allan Thygesen, the decline in billings this year was expected due to 'foundational go-to-market changes' following the adoption of Intelligent Agreement Management, an AI-driven agreement platform.
However, Thygesen said that 'the impact happened sooner than anticipated,' causing the drop in early renewals during the first quarter period, and negatively impacting billings growth.
In the first quarter of the year, DocuSign, Inc. (NASDAQ:DOCU) achieved a 118-percent jump in net income to $72 million from $33 million in the same period last year.
Revenues increased by 7.6 percent to $763 million from $709 million year-on-year.
Overall, DOCU ranks 2nd on our list of Friday's worst-performing stocks. While we acknowledge the potential of DOCU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
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