Adobe Systems Incorporated (ADBE) Stock Guide

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40

Before we start: if you're looking for ADBE stock price, you can quickly find it out by visiting Finny and typing "ADBE quote". If you're looking for a quick scoop on ADBE stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "ADBE". You'll get all this info in one place. Or you can just type "ADBE news" to get the latest stock news.

Looking to buy or sell Adobe Systems Incorporated (ADBE)? Interested in getting the full scoop on ADBE, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this ADBE stock guide, we'll address key questions about ADBE, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are ADBE earnings?
2. When is ADBE earnings date?
3. What is ADBE stock forecast (i.e., prediction)?
4. ADBE buy or sell? What is ADBE Finny Score?
5. What are the reasons to buy ADBE? Why should I buy ADBE stock?
6. What are the reasons to sell ADBE? Why should I sell ADBE stock?
7. What are ADBE key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are ADBE earnings?

ADBE trailing 12-month earnings per share (EPS) is $6.60.

2. When is ADBE earnings date?

ADBE earnings date is June 11, 2020.

Analyst Predictions

3. What is ADBE stock forecast (i.e., prediction)?

Based on ADBE analyst price targets, ADBE stock forecast is $339.58 (for a year from now). That means the average analyst price target for ADBE stock is $339.58. The prediction is based on 31 analyst estimates.

The low price target for ADBE is $290.00, while the high price target is $378.00.

ADBE analyst rating is Buy.

Analysis

4. ADBE buy or sell? What is ADBE Finny Score?

Our quantitative analysis shows 4 reasons to buy and 6 reasons to sell ADBE, resulting in Finny Score of 40.

5. What are the reasons to buy ADBE? Why should I buy ADBE stock?

Here are the reasons to buy ADBE stock:

  • Adobe's products are the industry standard for creative professionals, creating a network effect and high switching costs.
  • Microsoft discontinued its Expression Studio, a direct competitor to Adobe's Creative Suite, after seven years on the market.
  • The subscription model for creative cloud should go a long way to eliminating price sensitivity for potential new users, providing a boost for growth.
  • The company's Creative Cloud package of software tools added more subscribers, which drove revenue. Also, its digital media segment revenue increased year over year. Moreover, management provided a strong guidance for the upcoming quarter due to higher demand for its Creative and Marketing Cloud products.
  • Adobe changed its business model from licensing to a cloud-based subscription model. The company moved its market-leading graphic design and productivity offerings to the cloud with the launch of Creative Cloud. Creative Cloud allows consumers to pay a monthly fee to subscribe to various Creative Suite applications like Photoshop, Illustrator, Dreamweaver and others.
  • Adobe continues to be the market leader in the Digital Media space. The company provides one of the best solutions in most categories of digital media design and publishing, including Internet and video. In fiscal 2017, total Digital Media ARR (Annualized recurring revenue), the key cloud performance measure, grew by $1.24 billion.
  • Acrobat is one of the company’s most successful product lines with a huge installed base of satisfied customers. Through Acrobat.com, the company offers a set of a cloud-based document and collaboration subscription services which include PDF creation, centralized online file sharing and contract signing solutions. There are currently many drivers of the Acrobat business.
  • Adobe entered the digital marketing space with the acquisition of Omniture. This is an area where corporate spending is on the rise. A number of trends are spurring this trend, including the increased adoption of cloud computing, social media and mobile devices, as well as the emergence of big data analytics.
  • Using its new cloud-based platform, Adobe is also diversifying into digital marketing services, offering data mining services, which help businesses to measure page views, purchases and social media sites. Adobe Marketing Cloud enables marketers to deliver personalized web experiences across multiple devices, manage multichannel campaigns and optimize media monetization. These services help businesses streamline marketing and products for targeted consumer groups, including chief marketing officers, chief revenue officers, advertising agencies, publishing executives and digital marketers.
  • ADBE quarterly revenue growth was 18.80%, higher than the industry and sector average revenue growth (1.62% and 1.51%, respectively). See ADBE revenue growth chart.
  • ADBE profitability is improving. The YoY profit margin change was 5.49 percentage points. See ADBE profitability chart.
  • ADBE average analyst rating is Buy. See ADBE analyst rating chart.
  • ADBE cash to debt ratio is 0.89, higher than the average industry (0.16) and sector (0.17) cash to debt ratio. See ADBE cash to debt chart.

6. What are the reasons to sell ADBE? Why should I sell ADBE stock?

Let's look at the reasons to sell ADBE stock (i.e., the bear case):

  • A large number of legacy Creative Suite users have yet to migrate to Creative Cloud, a pool of customers Adobe is counting on for near- to medium-term growth.
  • Competition for Adobe’s marketing solutions will remain intense for the foreseeable future, with heavy hitters such as Salesforce.com, Oracle, and IBM jockeying for position.
  • Competition at the low end of the creative market will maintain pressure on Adobe to innovate, even if a full-feature competitive solution never materializes.
  • The dynamics of the business are changing rapidly as a result of the transition to the subscription model. The company is receiving lower upfront fees. Also, with the new model, the switching costs have gone down so it becomes easier for customers to switch to competing platforms.
  • Also, lower end-market demand could impact earnings in the near term. We believe that this is the result of weak global economic conditions, the unwillingness of the user to spend on the modified Acrobat software and softness in the core computing market. The company’s software runs on personal computers and server-based computers, as well as on smartphones, tablets and other devices.
  • Adobe has significant exposure to Europe, with the Europe, the Middle East and Africa (EMEA) region contributing around 28% of sales in the fiscal year 2017. Given the currency headwinds faced by U.S. companies operating in Europe, 2018 results will continue to be impacted.
  • Overdependence on a few products. While Adobe does have a presence in other areas and recent results have been encouraging, more than half the revenue continues to come from the Creative Cloud and Acrobat product lines. Therefore, softness at customers and/or success rates of new platforms have a significant impact on results.
  • ADBE stock price ($385.26) is close to the 52-week high ($386.38). Perhaps now is a good time to sell? See ADBE price chart.
  • ADBE forward P/E ratio is 31.82, which is high compared to its industry peers’ P/E ratios. See ADBE forward P/E ratio chart.
  • ADBE Price/Sales ratio is 14.68, which is high compared to its industry peers’ P/S ratios. See ADBE forward Price/Sales ratio chart.
  • ADBE average analyst price target ($339.58) is below its current price ($385.26). See ADBE price target chart.
  • ADBE Enterprise Value/Revenue multiple is 15.23, which is high compared to its industry peers’ Enterprise Value/Revenue multiples. See ADBE Enterprise Value/Revenue chart.
  • ADBE Enterprise Value/EBITDA multiple is 43.55, which is high compared to its industry peers’ Enterprise Value/EBITDA ratios. See ADBE Enterprise Value/EBITDA chart.

Key Stats

7. What are ADBE key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for ADBE:

Metrics ADBE
Price $385.34
Average Price Target / Upside $339.58 / -11.88%
Average Analyst Rating Buy
Forward Dividend Yield 0.00%
Industry Software - Application
Sector Technology
Number of Employees 21,357
Market Cap $171.23B
Forward P/E Ratio 31.82
Price/Book Ratio 14.68
Revenue (TTM) $11.66B
YoY Quarterly Revenue Growth 18.80%
Profit Margin 27.72%

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