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Adobe Systems Incorporated (ADBE)
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Upturn Advisory Summary
02/20/2025: ADBE (1-star) is currently NOT-A-BUY. Pass it for now.
Analysis of Past Performance
Type Stock | Historic Profit -45.5% | Avg. Invested days 26 | Today’s Advisory PASS |
Upturn Star Rating ![]() ![]() | Upturn Advisory Performance ![]() | Stock Returns Performance ![]() |
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Key Highlights
Company Size Large-Cap Stock | Market Capitalization 197.93B USD | Price to earnings Ratio 36.85 | 1Y Target Price 567.55 |
Price to earnings Ratio 36.85 | 1Y Target Price 567.55 | ||
Volume (30-day avg) 3545003 | Beta 1.31 | 52 Weeks Range 403.75 - 587.75 | Updated Date 02/21/2025 |
52 Weeks Range 403.75 - 587.75 | Updated Date 02/21/2025 | ||
Dividends yield (FY) - | Basic EPS (TTM) 12.34 |
Revenue by Products
Product revenue - Year on Year
Revenue by Geography
Geography revenue - Year on Year
Earnings Date
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin 25.85% | Operating Margin (TTM) 36.3% |
Management Effectiveness
Return on Assets (TTM) 16.29% | Return on Equity (TTM) 36.31% |
Valuation
Trailing PE 36.85 | Forward PE 22.42 | Enterprise Value 197097747000 | Price to Sales(TTM) 9.2 |
Enterprise Value 197097747000 | Price to Sales(TTM) 9.2 | ||
Enterprise Value to Revenue 9.17 | Enterprise Value to EBITDA 24.77 | Shares Outstanding 435300000 | Shares Floating 434094219 |
Shares Outstanding 435300000 | Shares Floating 434094219 | ||
Percent Insiders 0.38 | Percent Institutions 85.29 |
AI Summary
Adobe Systems Incorporated Stock Overview
Company Profile:
History: Founded in 1982 by John Warnock and Charles Geschke, Adobe revolutionized publishing with the PostScript page description language and the Portable Document Format (PDF). Initially focusing on desktop publishing software, Adobe expanded into web development tools, digital imaging, and video editing.
Core Business Areas:
- Digital Media: Creative Cloud suite (Photoshop, Illustrator, Premiere Pro, After Effects), Acrobat DC, and Stock Photos.
- Digital Experience: Experience Cloud (analytics, marketing, advertising, commerce), Document Cloud (e-signatures, document management).
- Print and Publishing: Creative Suite, Acrobat DC, InDesign, and Lightroom.
Leadership Team:
- Shantanu Narayen: Chairman and CEO
- Steven Moyer: CFO
- Ann Lewnes: EVP and CMO
- David Wadhwani: EVP and GM of Digital Media
- Anil Chakravarthy: EVP and GM of Digital Experience
Top Products and Market Share:
- Adobe Acrobat Reader: 90% market share in PDF viewers.
- Adobe Photoshop: 70% market share in image editing software.
- Adobe Illustrator: 80% market share in vector graphics software.
- Adobe Premiere Pro: 40% market share in non-linear video editing software.
- Adobe After Effects: 70% market share in motion graphics software.
Total Addressable Market:
The global digital content creation market is estimated to be $86 billion in 2023, with a projected CAGR of 10.5% reaching $146 billion by 2028.
Financial Performance:
- Revenue: $17.61 billion in FY2022, with a 13% YoY growth.
- Net Income: $3.41 billion in FY2022, with a 9% YoY growth.
- Profit Margin: 19.4% in FY2022.
- EPS: $9.86 in FY2022.
- Cash Flow: Strong cash flow generation with a free cash flow of $5.8 billion in FY2022.
- Balance Sheet: Healthy balance sheet with low debt levels.
Dividends and Shareholder Returns:
- Dividend History: Regular dividend payer with a current annual dividend of $4.80 per share. The recent dividend yield is 1.7%.
- Shareholder Returns: Total shareholder returns of 62% over the past 3 years, outperforming the S&P 500 Index.
Growth Trajectory:
- Historical Growth: Adobe has experienced consistent revenue and earnings growth over the past 5 years.
- Future Growth: The company is well-positioned for continued growth driven by strong demand for its Creative Cloud and Experience Cloud subscriptions.
- Recent Initiatives: Expansion into new markets, development of AI-powered features, and strategic partnerships are supporting future growth.
Market Dynamics:
- Industry Trends: Growing demand for digital content, cloud-based solutions, and artificial intelligence.
- Competitive Landscape: Intense competition from other software companies like Microsoft, Canva, and Corel.
- Adobe's Positioning: Strong brand recognition, large customer base, and leading market share in key segments.
Competitors:
- Microsoft (MSFT): Market share leader in office productivity software.
- Canva (CANVA): Growing competitor in online design and publishing tools.
- Corel (CORL): Established player in graphics and video editing software.
Potential Challenges and Opportunities:
- Challenges: Economic slowdown, competition from free and open-source software, and technological disruption.
- Opportunities: Growth in emerging markets, expansion into new product categories, and adoption of AI and machine learning.
Recent Acquisitions:
- Frame.io (2021): Cloud-based video collaboration platform.
- Workfront (2020): Marketing work management platform.
- Allegorithmic (2019): Substance 3D material creation software.
AI-Based Fundamental Rating:
8.5/10: Adobe Systems Incorporated is a financially strong company with a strong market position and significant growth potential. Its subscription-based business model provides recurring revenue and predictable cash flow. The company's exposure to growing markets and innovative product development further enhances its prospects. However, competition and potential economic headwinds remain as risk factors.
Sources:
- Adobe Systems Incorporated Investor Relations: https://investor.adobe.com/
- Statista: https://www.statista.com/
- GuruFocus: https://www.gurufocus.com/stock/ADBE/summary
Disclaimer:
This overview is for informational purposes only and should not be considered investment advice. Investors should conduct their own due diligence before making any investment decisions.
About Adobe Systems Incorporated
Exchange NASDAQ | Headquaters San Jose, CA, United States | ||
IPO Launch date 1986-08-20 | Chairman & CEO Mr. Shantanu Narayen | ||
Sector Technology | Industry Software - Application | Full time employees 30709 | Website https://www.adobe.com |
Full time employees 30709 | Website https://www.adobe.com |
Adobe Inc., together with its subsidiaries, operates as a technology company worldwide. It operates through three segments: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment offers products and services that enable individuals, teams, and enterprises to create, publish, and promote content; and Document Cloud, a cloud-based document services platform. Its flagship product is Creative Cloud, a subscription service that allows subscribers to use its creative products and applications (apps) integrated with cloud-delivered services across various surfaces and platforms. This segment serves photographers, video editors, graphic and experience designers, and game developers; content creators, students, marketers, and knowledge workers; and consumers. The Digital Experience segment provides an integrated platform and set of products, services, and solutions that enable brands and businesses to create, manage, execute, measure, monetize, and optimize customer experiences from analytics to commerce. This segment serves marketers, advertisers, agencies, publishers, merchandisers, merchants, web analysts, data scientists, developers, and executives across the C-suite. The Publishing and Advertising segment offers products and services, such as e-learning solutions, technical document publishing, web conferencing, document and forms platform, web application development, and high-end printing, as well as Adobe Advertising offerings. It provides consulting, training, customer management, technical support, and learning services. The company offers its solutions directly to enterprise customers through its sales force and local field offices, and directly to businesses and consumers, as well as licenses its products to end-user customers through app stores and website at adobe.com. It markets and distributes its products through sales channels, including distributors, retailers, software developers, mobile app stores, systems integrators, independent software vendors, value-added res
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