3 SaaS Stocks Plummet 25% As The Work-From-Home Trade Fades

The COVID-19 pandemic led to the rise of many things — the retail investor, to-go margaritas and virtual rap battles to name a few. But potentially the biggest beneficiary of the pandemic has been companies in the work-from-home industry and software-as-a-service (SaaS) companies.

DocuSign Inc DOCU, a company that allows businesses and individuals to legally sign contracts electronically, saw its stock skyrocket from around $90 to highs of $300 during the COVID-19 pandemic.

Asana Inc ASAN is a business that specializes in helping work teams optimize their projects and tasks, especially when those working are remote and not in the office together. Asana’s stock went public in October, 2020, just seven months after the pandemic hit the United States. The stock went from around $25 a share when it opened, to more than $140 a share just last month (good for more than a 440% gain).

Domo Inc DOMO is a cloud software company focused on business intelligence tools and making data easier to visualize. Before the pandemic, Domo’s stock was trading around $27 a share. At its highs in August, 2021, Domo’s stock was around $94 a share.

DocuSign Plummets 40%: A Technical Breakdown

Undoubtedly, these companies all benefited from the work-place shift we witnessed throughout the pandemic. As a result, their stocks and investors benefited as well.

Unfortunately for shareholders of these three companies, high-flying stocks can quickly come crashing down. All three companies reported earnings after hours on Thursday. While the reports themselves were not terrible, the companies warned of consumer behavior shifting.

"We got to a place over the past year, year and a half, where we were fulfilling demand. And what we've always done in the past is generate demand," said DocuSign CEO Dan Springer.

Springer acknowledged that demand and growth had slowed down in the quarter following strong demand throughout the pandemic.

While these companies will continue to help businesses operate and grow as we shift to a more digital workplace, it may be time to lay to rest the “work from home trade” as the FED did with the word “transitory.”

DocuSign's stock closed Friday down 42.2% at $135.09, Asana closed down 26% at $66.98 and Domo closed lower by 25.9% at $48.26.