DocuSign falls as Piper Sandler downgrades, citing 'elevated' risks, low chance of M&A
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DocuSign (NASDAQ:DOCU) shares fell on Thursday as investment firm Piper Sandler downgraded the electronic agreement software company, noting the "elevated" risks surrounding the company. 
Analyst Rob Owens lowered his rating on DocuSign (DOCU) shares to underweight from neutral and cut the price target to $54 from $65, noting there is risk amid the transition to a new CEO, "consistent" execution challenges, continued employee turnover and an economy that continues to look more challenging by the day. 
"All of these factors contribute to a challenging backdrop for potential revenue reacceleration in the near-term, in our view," Owens wrote, adding that even with shares down 80% from their peak, the only hope is in the form of a takeout, but that may not happen. 
DocuSign (DOCU) shares fell almost 2.5% to $65.38 in early trading.
In addition, Owens noted that recent commentary coming from DocuSign (DOCU) attributes the softer growth to a weaker macro and a post-COVID world, but Adobe (ADBE) and other competitors are not seeing the same level of weakness. 
"Overall, commentary from ADBE combined with a rapidly deteriorating macro indicate to us that DOCU is likely facing both execution and market challenges, which add to the overall risk profile in our view," Owens added.
Concerning the ongoing search for a new CEO, DocuSign (DOCU) has an interim leader since Dan Springer resigned last month. However, it's likely that there will be execution problems "over the next few quarters" while the company tries to find the right person for the job, Owens explained.
Analysts have been mixed on DocuSign (DOCU). It had an average rating of HOLD from Seeking Alpha authors, while Wall Street analysts also rate it a HOLD. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates DOCU a STRONG SELL.