DOCU – Market expectations are for a positive inflection in Uniform ROA, but management may have concerns about customer growth, retention rates, and international markets

• DocuSign, Inc. (DOCU:USA) currently trades at a significant premium to UAFRS-based (Uniform) assets, with a 32.9x Uniform P/B. At these levels, the market is pricing in expectations for profitability to inflect positively, but management may have concerns about customer base growth, dollar net retention rates, and international market opportunities
• Specifically, management may lack confidence in their ability to sustain customer base growth, maintain their dollar net retention rate, and capture market share in international markets. In addition, they may have concerns about disruptions to their FY2022 free cash flow guidance, slowing capacity growth, and intensifying competition. Moreover, management may be exaggerating the potential of eSignature’s new features as well as the ease of use of their products. Finally, management may be concerned about weakening demand for their Contract Lifecycle Management (CLM) product and their partnerships with Global System Integrators (GSIs)