Shares of Adobe Inc. sank to their worst performance in more than 20 months Friday, after DocuSign Inc. delivered what some saw as a the latest sign of a demand cool-down for work-from-home software.
DocuSign DOCU,
Some of that investor fear seemed to transfer over to Adobe ADBE,
The decline in Adobe shares struck Wedbush analyst Daniel Ives as a “DOCU-related selloff,” he told MarketWatch, as DocuSign’s report served as a “a barometer that the WFH tailwinds are now abating and could be a headwind for Adobe.”
“The DOCU print was a shocker and this is a knee-jerk reaction,” he said.
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Adobe is due to post its own quarterly results Dec. 16. The company highlighted its e-signature technology in its prior earnings report, as Chief Financial Officer John Murphy noted that “third-quarter Document Cloud growth drivers included adoption of Sign in Acrobat driven by the increased need to collaborate in a hybrid work environment.”
While other at-home stocks took a hit on disappointing outlooks earlier in the course of the pandemic, DocuSign initially appeared more resilient. Its stock hit an all-time high in September and was up 165% since March 2020 as of Thursday’s close. Now the company will need to “show that it can generate, not just fulfill, demand on a regular basis,” according to an Evercore analyst.
Adobe has a more diversified business than DocuSign. While the company sells contract-related software, it has a variety of other offerings including subscriptions to creative programs like Photoshop. Adobe’s Document Cloud accounted for about 13% of the company’s overall revenue in its last-reported quarter.
Shares of Adobe were up 86% since March 2020 as of Thursday’s close.
