Investing

Earnings Previews: DocuSign, Oracle

Paul Ausick

Published: March 9, 2022 11:30 am

After markets closed Tuesday, online apparel retailer Stitch Fix reported better than expected quarterly results but issued downside guidance. In premarket trading Wednesday morning, the stock was down about 20%. Fashion retailer Express beat on both the top and bottom lines and guided 2023 revenues above estimates. Shares traded up nearly 10% early Wednesday.

Campbell Soup reported mixed results Wednesday morning and the stock traded up about 1%. Container shipping firm Zim beat quarterly revenue and earnings estimates and declared a dividend of $17 a share to shareholders of record on March 23. Shares traded up more than 10% in Wednesday’s premarket session.

We already have previewed reports due out after markets close Wednesday and before they open on Thursday: CrowdStrike, First Majestic Silver, JD.com and KE Holdings, as well as three expected after markets close Thursday’s closing bell and one late on Friday: Ballard Power, Blink and Rivian.

Here is a look at two tech companies set to report results after markets close on Thursday.

DocuSign

Shares of cloud-based signature and contract management software provider DocuSign Inc. (NASDAQ: DOCU) have dropped by about 52% over the past 12 months. At the end of its July quarter, DocuSign was trading about 33% over the 12-month period. Shares plummeted by 13% in September, bounced about halfway back by early November, and have dipped by nearly 15% since then.

Revenue has beaten analysts’ consensus estimate for 12 consecutive quarters and profits have beaten estimates in 11 of 12 quarters, the last nine consecutive beats. DocuSign reports fourth-quarter results after markets close Thursday.

Of 20 brokerages covering the company, 12 have rated the stock at Buy or Strong Buy and seven have a Hold rating. At a share price of around $95.00, the upside potential based on a median price target of $184.50 is about 94%. At the high price target of $307, the upside potential is 223%.

Fourth-quarter revenue is forecast at $561.6 million, up 3% sequentially and about 30% higher year over year. Adjusted earnings per share (EPS) are forecast at $0.48, down 17.5% sequentially but up about 30% year over year. For the full 2022 fiscal year that ended in January, DocuSign is expected to post EPS of $1.98, up 195%, on sales of $2.09 billion, up 43.7%.

DocuSign trades at 48.7 times expected 2022 EPS, 44.7 times estimated 2023 earnings of $2.15 and 35.1 times estimated 2024 earnings of $2.76 per share. The stock’s 52-week range is $60.60 to $314.76. The company does not pay a dividend. Total shareholder return for the past year is negative 54.5%.

Oracle

Software and cloud-computing giant Oracle Corp. (NYSE: ORCL) has added about 5.7% to its share price over the past 12 months, including a drop of 27.3% since mid-December. The company reports quarterly results after markets close Thursday.

Last week, the company suspended all business operations in Russia. The company’s planned $28.3 billion acquisition of digital healthcare firm Cerner was announced in December and the deal is expected to close later this year. Data analytics firm Enterprise Technology Research reported that Oracle’s cloud platform grew faster than competitors AWS, Azure, and Google Cloud in three months between October and January.

Of 27 analysts covering the stock, just six have a Buy or Strong Buy rating and 18 rate the shares at Hold rating. At a share price of around $75.60, the upside potential based on a median price target of $101.50 is about 34.3%. At the high price target of $126, the upside potential is 66.7%.

Fiscal third-quarter revenue is forecast at $10.51 billion, up 1.5% sequentially and 4.2% year over year. Adjusted EPS are pegged at $1.18, down 2.6% sequentially but up 1.7% year over year. For full fiscal 2022 ending in May, current estimates call for EPS of $4.82, up less than 3.1%, on sales of $42.36 billion, up 4.6%.

Oracle stock trades at 15.7 times expected 2022 EPS, 14.4 times estimated 2023 earnings of $5.24 and 13.1 times estimated 2024 earnings of $5.75 per share. The stock’s 52-week range is $60.60 to $314.76. Oracle does not pay a dividend. Total shareholder return for the past year is negative 54.5%.