Mark Avallone: this stock down 65% from its ATH is a buy


U.S. indices were in the green all Friday but Potomac Wealth Advisors’ Mark Avallone warns it doesn’t indicate an end to volatility. He expects more turbulence ahead related to the geopolitical landscape and the Fed’s response to inflation.

Avallone’s bull case for DocuSign Inc

Amidst uncertainty, an interesting stock that he says is a great pick is DocuSign Inc (NASDAQ: DOCU), down 65% from its all-time high in early September 2021. Making a bull case for the stock on CNBC’s “The Exchange”, Avallone said:

It’s an absolutely amazing product. It helps create such efficiencies. Frankly, they can charge a lot more for the service because of the value they bring consumers. On an ongoing basis, DocuSign will become a word that we use daily in business. It’s how businesses will be conducted in the future.

DocuSign was a notable pandemic beneficiary as businesses were forced into work-from-home arrangements, fuelling a close to 300% growth in the stock in about eighteen months. Avallone, however, is convinced the cloud company is much more than just a COVID play.

DocuSign will report Q4 results on March 11th

In December, CEO Dan Springer lowered guidance for the fiscal fourth quarter. DocuSign is now scheduled to report its Q4 results on March 11th, which is likely to set direction for the stock.

The chief executive, however, recently bought $4.80 million worth of company stock that’s usually seen as a sign of confidence. Influential investor Cathie Wood also loaded up on the stock to capitalize on the weakness.

A day earlier, DocuSign announced an integration partnership with Zoom Video Communications. According to Barron’s, the Wall Street has an average price target of $190 a share on DOCU that represents a 65% upside from here.

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