Adobe Systems Inc stock was down on Wednesday after a report for the most recent quarter and an outlook for the second quarter highlighted the slowing down in the growth of its business Creative Cloud.
Some reluctant in adopting and price resistance for Creative Cloud applications by customers who are not converted yet might slow the rate of adopting even further warned an analyst from Morgan Stanley.
Adobe added over 517,000 new subscribers during its first quarter, which was down from the more than 644,000 during its fourth quarter, missing Wall Street expectations of 573,000.
Morgan Stanley kept its same rating and target price of $70 on the stock of Adobe, but said it has become concerned that there could be a risk to the fiscal 2015 targets for the company of subscribers reaching 5.9 million.
Another analyst maintain a rating of sector perform on Adobe stock and supported a price target of $83, while a third maintained its market perform rating with a target of $82.
Adobe shares dropped 4% in recent trading, but over the past 12 months are more than 13% higher.
Management for Adobe opted to not give any update to fiscal guidance for 2015, which analysts have said was not a big deal. However, the weaker than had been expected outlook for the second quarter at Adobe, did not sit well with investors or analysts.
One analyst in a note to his clients said that second quarter guidance was less than expected and would likely caused the company’s investors to pause until a clearer pattern emerges of subscriber growth as ADBE continues experimenting with new promotions and its bundling mixes.
This outlook came even though the launching by Adobe of its latest product in its series on clouds, Document Cloud, which includes new technology and Acrobat DC. The new technology scans and then uploads paper documents that can be edited digitally. Subscriptions start with the next 30 days, said Adobe.
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