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  5. DOCU: Pinterest and Docusign have recently replaced CEOs suggesting a need to change strategies. [DocuSign Inc.]
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Investment Q&A

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Q: Pinterest and Docusign have recently replaced CEOs suggesting a need to change strategies. They, and companies like Enghouse seems to be facing uphill battles to regain the positive outlook they had a couple of years ago.

Is it worth sticking with these companies to see if they improve, or is it wiser to take my lumps in small positions in these companies and consolidate into bigger positions in companies that offer more promise going forward like GOOG and BAM?

Asked by Kevin on July 05, 2022
5i Research Answer:

 We do not believe there is reason to give up on PINS yet. It has $2.4B net cash, and is trading at a 4.0X forward sales and 20.5X P/E multiple. ENGH has a good balance sheet and dividend, but it is facing revenue declines and increased competition in cloud-based services. Docusign is also facing some challenges, but it may be interesting as a takeover target.

We feel that all of these names will perform much better once interest rates peak. While we cannot personalize answers, consolidating into a stronger name like GOOG or BAM will have its merits over the long-term, but we also feel that these names can easily spike higher when interest rates peak.

Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in PINS.