Adobe Inc. (ADBE)
Adobe: Rating Upgrade Per Rule Of 40
Adobe's margin outlook has improved, with net margins likely to surpass 30% in the upcoming quarter, alleviating my prior cost concerns from the Figma acquisition. I expect Adobe to begin consistently passing the Rule of 40 in the coming quarters. Adobe's current valuation is deeply discounted versus its own historical average and EV/sales ratios for companies with passing scores.
Adobe's Record-High Profitability Outshines Digital Media Deceleration
Although the digital media segment is slightly decelerating, Adobe's Firefly is showing triple-digit growth in both revenues and MAUs. Adobe is a leading company with a big moat, but it is now threatened by AI developments and potential new rival products. Profitability is at an all-time high; meanwhile, valuation has improved strongly. This is the main reason why I'm taking a contrarian view of the market.
Why I Fear Adobe's AI Risks, Yet Still See Large Upside
Adobe's fundamentals remain strong, with solid revenue growth, profitability, and a sticky subscription-based business model. AI poses a significant long-term risk to Adobe's moat, potentially eroding its pricing power and customer base as alternatives improve. Valuation is attractive after a 36% stock drop, offering potential 35-70% upside if multiples re-rate, but caution is warranted.
Adobe: Initiating Coverage; A Buy On Solid Fundamentals
Adobe's double-digit revenue and EPS growth, alongside a low P/E of ~17, make it an attractive investment opportunity. The digital media segment drives growth, with a >25% increase in monthly active users and strong expansion in mobile and subscription revenues. A robust $25 billion share repurchase program and $20 billion in remaining performance obligations highlight Adobe's commitment to shareholder returns.
Adobe: Don't Count This Stock Out Yet As Firefly AI Drives New Subscribers
Adobe shares have lagged this year, declining ~20%, despite strong fundamentals and raised guidance, creating an attractive entry point for long-term investors. Despite fears that AI will crowd out Adobe, the company has released AI tools (particularly Firefly) that are expected to reach $250 million in ARR by year-end. The company notes that AI products are also bringing in brand-new subscribers to Adobe, creating cross-sell opportunities.
Here's Why Adobe Systems (ADBE) is a Strong Growth Stock
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Adobe Systems (ADBE) Beats Stock Market Upswing: What Investors Need to Know
Adobe Systems (ADBE) reached $345.62 at the closing of the latest trading day, reflecting a +2.03% change compared to its last close.
ClearBridge Large Cap Growth Strategy Q2 2025 Portfolio Positioning
We actively rebalanced the portfolio, adding Broadcom and Marvell to capitalize on AI chip growth and trimming Taiwan Semiconductor due to geopolitical risks. Initiated new positions in ServiceNow, Airbus, and Linde to diversify growth exposure and benefit from secular trends in SaaS, aerospace, and industrial gases. Exited Target, ICON, and Adobe due to macro headwinds, delayed recoveries, and rising competitive pressures from AI, respectively, to manage portfolio risk.
Adobe Inc. (ADBE) is Attracting Investor Attention: Here is What You Should Know
Zacks.com users have recently been watching Adobe (ADBE) quite a bit. Thus, it is worth knowing the facts that could determine the stock's prospects.
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Top Wide-Moat Stocks to Buy for Long-Term Wealth and Stability
LRCX, ADBE, DIS and YUM use strong moats to fend off rivals and deliver consistent returns amid market shifts.
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The GARP strategy helps investors gain exposure to stocks that have solid prospects and are trading at a discount. GE, ADSK, ADBE and SFM are some such stocks.
