DocuSign (DOCU) reported after the close yesterday and for the first time since the company went public back in April of 2018, it did not report an earnings triple play.  Although revenues grew 41% YoY to $235.61 million (~$15 mm above estimates) and the company raised guidance, EPS was 3 cents below analyst estimates.  As shown in our Earnings Explorer below, before this report DOCU had been flawless on earnings.  Despite the strong fundamental picture from these past quarters, the stock price reaction has consistently been negative.  Only after the first earnings report as a public company did the stock finish the next day higher, and even then, it fell from open to close.

Given this somewhat confusing disconnect between strong results and the stock’s reaction, it almost seems to make sense that DOCU rallied today despite missing EPS for the first time. DOCU broke a streak of three straight moves lower on earnings with a gap up of 20.4% at the open. Intraday the stock has more or less held onto these gains but experienced swings of a few percentage points in both directions.  At the highs of the day, it was up 3.3% from the open and at today’s lows, it was down 2.9% from the open. Regardless of the indecisive intraday price action, the massive gap up has brought the stock back up to levels last seen at the end of May and above the past year’s downtrend line.  The stock is also now trading above its 50 and 200-day moving averages for the first time since the beginning of August. Start a two-week free trial to Bespoke Institutional to access our interactive Earnings Explorer and much more.

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