• Docusign stock plunged 26% on Friday after the company reported mixed first-quarter results.

• The software company missed first-quarter estimates and once again lowered its billings guidance.

• "The demise of Docusign's growth story continues as the WFH poster child faces new and ongoing complications," Wedbush said.

Docusign stock plunged 26% on Friday after the company reported mixed first-quarter results that suggest the company's fast-growing work-from-home days are continuing to unravel.

In addition, the maker of electronic signature software lowered its fiscal 2023 billings guidance by $185 million, which put the company in the penalty box with investors once again, according to Wedbush analyst Dan Ives.

Here were the key numbers:

Revenue: $588.7 million, versus analyst expectations of $581.9 million
Adjusted earnings per share: $0.38, versus analyst expectations of $0.46
Second-quarter outlook: Total revenue of $600 million to $604 million, versus analyst expectations of $604.6 million.

While Docusign keeps disappointing investors, with its stock trading near 52-week lows, it saw its free cash flow grow year over year to $175 million, and the company was sitting on more than $1 billion of cash at the end of the quarter.

But that's not good enough considering Docusign's previous fast growing years amid the COVID-19 pandemic lockdowns, according to Ives. In a note on Friday, he said Docusign's earnings results represented "a debacle billings guide that speaks to some darker growth days ahead."

"The company once again lowered billings guidance which continues to overshadow the top-line revenue beat the company experienced this quarter. The demise of Docusign's growth story continues as the work-from-home poster child faces new and ongoing complications with the selling environment following COVID's pull forward effect on sales over the previous two years and deceleration of their planned expansion," Ives added.

Meanwhile, Docusign's international sales growth took a hit from macroeconomic constraints like rising interest rates, along with Russia's war against Ukraine, according to the note.

"As management continues to figure out how to handle the rising complications and headwinds to improve sales execution in this backdrop, we believe that the end of Docusign's core growth story is now essentially over with the clock striking midnight following a billings guidance drop of ~$200 million pointing to an uncertain future for the remainder of FY23," Ives said.

He maintained his "Outperform" rating on Docusign and lowered his price target to $50 from $60, reflecting the ongoing uncertainty and lower guidance.

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