DOCU & COST Earnings Follow Up
Docusign (DOCU) reported earnings Thursday afternoon and things are playing out as I suspected they might (“Speculating On DOCU Earnings”, 12/4). Significantly better than expected earnings resulted in a 10.5% spike in the after hours. We may not get to $56 – which we need for the calls I recommended in the blog to be in the money – but it’s possible. I’ll likely hold the calls until the end of the day as shorts may be forced to cover throughout the session squeezing the stock into the close. At any rate, after being destroyed for the last year the bottom may be in for DOCU.
Costco (COST) also reported Thursday afternoon and my preview was on the mark as well (“Don’t Worry About COST”, 12/8). We already knew the comp number for the quarter (+7.1%) which they reported last week. The earnings metrics (gross margin, operating margin, EPS) were all fine. The stock was flat in the after hours and I will stick to my plan articulated in the blog to acquire the other half of a small position during Friday’s session.