09:56 AM EDT, 06/07/2024 (MT Newswires) -- DocuSign's ( DOCU ) "skinny beat" in its fiscal Q1 results late Thursday weighed on its share price after the market close and will temper near-term expectations, RBC Capital Markets said in a note to clients emailed Friday.

DocuSign ( DOCU ) shares were down past 7% in recent Friday trading.

"All in, the quarter was fine but below high expectations and likely tempers the case for near-term reacceleration (and IAM). All in, we see shares as fairly valued," RBC said.

The company reported fiscal Q1 non-GAAP earnings late Thursday of $0.82 per diluted share, up from $0.72 a year earlier. Analysts polled by Capital IQ expected $0.79. Revenue was $709.6 million, up from $661.4 million a year earlier. Analysts expected $707.4 million.

"On one hand, upside to revenue, billings, and operating margin was less than usual, which management suggested is the new normal (i.e., change in guidance philosophy). Also, FY25 subscription revenue and billings guidance was raised but by less than the beat," RBC said. "On the other hand, PLG investments are starting to bear fruit and consumption trends improved

slightly."

RBC cut DocuSign's ( DOCU ) price target to to $52 from $59 and kept the sector perform rating.

Price: 49.53, Change: -5.07, Percent Change: -9.29