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Adobe Inc. (NASDAQ: $ADBE) Stock

Adobe Inc., (NASDAQ: $ADBE) previously known as Adobe Systems Incorporated, is a prominent American multinational computer software corporation incorporated in Delaware and headquartered in San Jose, California. Throughout its history, Adobe has focused on creating and publishing a wide array of content, encompassing graphics, photography, illustration, animation, multimedia/video, motion pictures, and print.

Among its flagship products are Adobe Photoshop, a software for image editing; Adobe Illustrator, which specializes in vector-based illustration; Adobe Acrobat Reader, designed for handling the Portable Document Format (PDF); as well as an array of tools primarily tailored for the creation, editing, and publishing of audio-visual content.

Adobe once provided a bundled solution of its products under the name Adobe Creative Suite, which evolved into a subscription-based software as a service (SaaS) offering known as Adobe Creative Cloud. In addition to its core software offerings, the company expanded into the realm of digital marketing software. In 2021, Adobe earned recognition as one of the top global leaders in Customer Experience Management (CXM).

The origins of Adobe trace back to its founding in December 1982 by John Warnock and Charles Geschke, who established the company after departing from Xerox PARC to develop and market the PostScript page description language.

In 1985, Apple Computer licensed PostScript for use in its LaserWriter printers, which played a pivotal role in igniting the desktop publishing revolution.

Adobe’s growth also included the acquisition of Macromedia, which brought Macromedia Flash into its portfolio, as well as the development of video editing and composing software under the name Adobe Premiere (later known as Adobe Premiere Pro) and tools for low-code web development with Adobe Muse. This extensive suite of software expanded Adobe’s presence in the domain of digital marketing management.

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Adobe Inc. Stock (ADBE) Price

The Adobe Inc. stock concluded trading on Tuesday, November 7, 2023, with a closing price of $584.90 on the NASDAQ. This represents a 2.75% increase from the opening price of $568.81 on the same day. Adobe Inc. boasts a market capitalization of $256.32 billion, supported by 455.30 million shares outstanding.

Facts to Know Before Investing On ADBE

In the last month, the stock of this software company has delivered a return of +8.2%, outperforming the Zacks S&P 500 composite’s +0.8% gain. During this same period, the Zacks Computer – Software industry, to which Adobe belongs, has experienced a 6.1% increase. The pivotal question now is: What lies ahead for this stock?

While news releases or speculation concerning a significant shift in a company’s business outlook often result in the stock becoming ‘trending’ and causing immediate price fluctuations, there are always underlying fundamentals that ultimately govern the decision-making process for long-term investors.

Revisions to Earnings Estimates

Our analysis primarily relies on the adjustments made by sell-side analysts who cover the stock, incorporating the latest business trends into their earnings estimates. When these estimates for a company rise, the fair value of its stock also increases.

Consequently, when a stock’s fair value surpasses its current market price, investors are more inclined to purchase the stock, which leads to an upward movement in its price.

As a result, empirical studies consistently demonstrate a robust connection between shifts in earnings estimate revisions and short-term fluctuations in stock prices.

Projected Revenue Growth

Earnings growth is undeniably a paramount measure of a company’s financial well-being, but it’s important to recognize that without revenue growth, such progress remains elusive. Indeed, sustained earnings expansion is nearly unattainable if a business does not concurrently boost its revenues. Therefore, understanding a company’s potential for revenue growth is of vital significance.

Valuation

An efficient investment decision cannot be made without taking into account a stock’s valuation. When forecasting a stock’s future price performance, it becomes imperative to assess whether its present price accurately reflects the intrinsic worth of the underlying business and the company’s growth potential.

Evaluating a company’s valuation metrics, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), in relation to both its historical values and those of its industry peers is essential.

This approach helps in determining whether the stock is reasonably priced, overvalued, or undervalued, offering valuable insights into the rationality of its current market price.

Who owns ADBE?

Institutional investors exert significant control over ADBE, owning a majority stake of 83.57% of the outstanding shares. This level of ownership surpasses that of nearly every other company in the Packaged Software industry.

Is Adobe stock a Buy, Sell or Hold?

Adobe stock has garnered a unanimous “buy” consensus rating, with an average rating score of A2, derived from 63 buy ratings, 34 hold ratings, and 1 sell rating.

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