Investing.com -- Adobe shares are under fresh pressure on Friday after its latest quarterly results, with Wall Street firms downgrading the stock, citing a strategic pivot toward freemium growth and continued leadership turmoil.

Wolfe Research downgraded Adobe to Peer Perform from Outperform, with analyst Alex Zukin calling the quarter "thesis changing."

Net new ARR excluding Semrush came in at $560 million, down 3% year-over-year, while organic ARR growth guidance was cut by roughly $480 million, or about 2 percentage points, half due to delayed pricing initiatives and half from an expanded freemium push.

Wolfe set a fair value range of $165-$210, noting that while AI ARR tripled year-over-year, "total NNARR still declined Y/Y, making it harder to underwrite durable ARR growth."

Evercore ISI moved to In Line from Outperform, cutting its price target to $225. Analyst Kirk Materne said Adobe reset its full-year organic ARR outlook by approximately $500 million, with the headline 10.2% total ARR growth target now incorporating roughly $480 million of Semrush ARR.

Materne said he was "wrong to assume that a washed-out valuation could bridge investors to a narrative reset," and doesn't expect sentiment to improve until a new CEO and CFO are in place and demonstrate execution.

Stifel downgraded Adobe to Hold from Buy. Analyst J. Parker Lane noted organic ARR of $26.62 billion was largely in line, but the company "meaningfully lowered its F2H organic ARR outlook" while trading near-term growth for monthly active user growth.

The downgrade also reflects the announced departure of CFO Dan Durn, adding to the uncertainty already created by CEO Shantanu Narayen's planned exit later this year.