Why the Nitro (ASX:NTO) share price is sinking 10% today

Nitro is under pressure on Friday…
The post Why the Nitro (ASX:NTO) share price is sinking 10% today appeared first on The Motley Fool Australia. –

The Nitro Software Ltd (ASX: NTO) share price is on course to end the week deep in the red.

In morning trade, the document productivity and eSigning company’s shares are down 10% to $3.00.

Why is the Nitro share price down 10%?

Investors have been selling down the Nitro share price in response to something across in the United States.

After the market close on Wall Street this morning, Nitro’s larger rival DocuSign Inc (NASDAQ: DOCU) released its quarterly results. While DocuSign reported a 44% increase in subscription revenue to US$528.6 million, its weaker than expected outlook spooked the market.

This led to the DocuSign share price crashing 30% during after hours trade, wiping off US$15 billion from its market capitalisation.

And unfortunately for the Nitro share price, investors appear to believe this could be a sign that Nitro’s outlook may not be as positive as hoped.

Is this a buying opportunity?

While Bell Potter could yet adjust its recommendation for Nitro to reflect DocuSign’s update, it has been very bullish on the company recently.

For example, last month the broker retained its buy rating and $4.50 price target on its shares. This implies potential upside of 50%.

Bell Potter was pleased with the company’s game-changing acquisition of Connective NV.

It commented: “Nitro announced it has entered into a binding agreement to acquire Connective NV for an EV of €70m (~US$81m). Connective is Belgium’s leading eSign SaaS business with fast growing market share in France and customers in 11 other European countries. The rationale for the acquisition is it will accelerate and enhance Nitro’s eSign, eID (electronic identity) and document workflow capabilities. It will also position Nitro to become the third global player in the enterprise eSign market along with DocuSign and Adobe.”

The post Why the Nitro (ASX:NTO) share price is sinking 10% today appeared first on The Motley Fool Australia.

Should you invest $1,000 in Nitro right now?

Before you consider Nitro, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Nitro wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

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3 ASX shares getting analysts very excited

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Why the Nitro (ASX:NTO) share price is down 9% on Thursday

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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