Opinions
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Adobe Systems
ADBE-Q
BUY
Jun 06, 2023
Stock price when the opinion was issued
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Still growing topline and bottom line at double digits. Spewing lots of free cash, buying back stock, great balance sheet. Worry is about how will AI affect its business? No evidence yet that it's impacting any of the company's results. Market's not respecting the fundamentals at the moment, maybe rightly so.
She got sick of holding this, because they have trouble with Photoshop--now people can use the tools found in PS elsewhere. She sold before the quarter. Also with Meta, clients can create their own ads using Meta's tools. Adobe hasn't moved fast enough to develop such tools.
He bought more. They beat top and bottom lines, and raised guidance. He's a value investor. Sure, the share price has been terrible, but their earnings estimates are starting to rise and they're buying back share to reduce the share count 5% in the past year. They are meeting the competitive threat through their beats and guidance. They outperform consistently. Eventually, the share price will rise.
Since Nvidia went ballistic on May 25, through June 2 Apple shares have climbed 5%, Microsoft 6% and Adobe nearly 17%. (NVDA itself soared 30% and counting.) Adobe already positioned itself as an AI stock in Generative AI back in March when it announced Generative AI functionality with Firefly that will make it easier and faster for Adobe users to use the company’s publishing tools, such as swapping background images and marketing text. Before that in 2022, the company announced new AI and machine learning features in its marketing and analytics software package, Experience Cloud. The market is banking on the new AI features to generate more revenues from Adobe’s subscribers. Read Top 3 AI Stocks for our full analysis.