Everything is easy when you’re Adobe. If your earnings report is not too good, you can use Photoshop and then say that this was not photoshopped; who can argue? Adobe looks like one of these unique flagship companies with no competitors. But is it good or bad? Let’s look at charts for Adobe stock and investigate what analysts think about its future.
Adobe suffered the fate of many tech companies that ascended to the top during the pandemic and then faced a rapid decline. Of course, Covid-19 wasn’t an event easy to forecast, but there’s a large number of things you can predict. The US economic calendar is a trading tool that helps you with this as it includes all the significant financial events and lets you utilize them to forecast subsequent market movements.
In the last year, there has been almost no trace of Covid consequences, but Adobe shares haven’t demonstrated stability as well as most of the world markets.
At the same time, the pandemic and the world crisis didn’t make Adobe products like Photoshop, Lightroom, or Acrobat less relevant. The advantages of all these programs didn’t disappear. Moreover, many digital workers and companies have no other alternatives. Especially after the announcement about the acquisition of Figma, a top-rated and relatively cheap service that was supposed to fight evil, not join it (disclaimer: this deal between Adobe and Figma is not finished yet because of the regulators’ investigation). It seems Adobe doesn’t have too many rivals, and there are now even fewer.
Another significant moment is Adobe’s advanced cloud subscription model. Combined with a large customer base and high subscription prices, it allows for a stable flow of profit. The last earnings report proves it. In Q1 2023, EPS and revenue turned out better than analysts’ expectations – 3.3% higher for EPS and 0.7% for revenue. Additionally, Adobe’s reported revenue became record-breaking – 13% YoY in constant currency. But we should also pay attention to slowing down revenue growth compared to previous years.
The company hasn’t forgotten about trends like AI technologies and actively integrates them into its products. For example, Adobe released Firefly, the fertile AI field that allows users to edit images by typing a text.
Many analysts believe that Adobe is a strong business that might be an excellent long-term investment. The consensus forecast for this tech giant is +15% in the next 12 months.
But don’t hurry to add these stocks to your portfolio. Remember that before buying or selling any assets, you should do your own analysis.