Last month, we expressed some major concerns over DocuSign stock (DOCU). It wasn’t just the single-digit revenue growth that raised a red flag. Net revenue retention rates – the amount of money existing customers are spending – have dropped for eight quarters in a row with no end in sight. That’s reflected in the declining number of customers shelling out more than $300,000 on the DocuSign platform. We’ve been watching this slowdown in the business for more than a year, and we decided that if things worsen much more for this LegalTech company, we might move out of our position.
Most people don’t quit a job until they’ve scoped out a new one. Similarly, we want to look at our options for potentially replacing DocuSign in the Nanalyze Disruptive Tech Portfolio should we decide to drop it. A couple of years ago, we profiled another software-as-a–service (SaaS) stock that specializes in LegalTech automation right after it IPO’d (rather than merging with a blank-check company when that was still a thing, we might add). Intapp (INTA) caught the tail end of the pandemic-fueled bull market in June 2021 before riding its first bear in the rodeo known as the Nasdaq.