Latest news with #ADBE
Yahoo
5 days ago
- Business
- Yahoo
Adobe Raises 2025 Earnings View: Is It on Track to Deliver Results?
Adobe's ADBE focus on infusing AI into its products is boosting prospects. The company raised its full-year earnings guidance to $20.50-$20.70 per share from $20.20-$20.50, following impressive second-quarter fiscal 2025 results. This upgraded outlook implies nearly 12% year-over-year company's optimism is driven by momentum across its Digital Media and Digital Experience segments. The continued adoption of AI-powered tools, such as Firefly, Acrobat AI Assistant, and GenStudio, is enhancing product value, driving deeper user engagement, and expanding Adobe's recurring revenue base, resulting in a 12% year-over-year increase in Annual Recurring Revenue (ARR) in the fiscal second confidence is driven by strong financial discipline. The company generated $2.19 billion in operating cash flow and reported $19.69 billion in remaining performance obligations, with 67% expected to be recognized within a year. These metrics provide a strong foundation to continue investing in innovation while supporting disciplined execution, deepening AI adoption and reliable recurring revenue base position the company well to achieve or even beat its 2025 earnings goal. Autodesk's ADSK core strength lies in its specialized 3D design tools like AutoCAD and Maya, serving the architecture, engineering and manufacturing sectors. Autodesk's robust cloud-based platforms, including BIM 360 and Fusion Lifecycle, support strong subscription growth. With rising demand for CAD and AEC solutions, Autodesk is well-positioned for sustained revenue expansion, though its premium pricing limits mass-market appeal compared to Adobe's broader, more accessible creative MSFT competitive edge over Adobe lies in its dominance across cloud infrastructure and AI-powered productivity tools. With Azure's rapid expansion and the growing adoption of Microsoft 365 Copilot, Microsoft offers deeper enterprise integration and workflow automation. While Adobe leads in creative software, Microsoft's broader ecosystem, AI leadership and diversified revenue base position it as a more comprehensive platform for enterprise digital transformation. Adobe shares have lost 18.2% year to date, while the broader Zacks Computer and Technology sector has returned 7.5% and the Computer-Software industry has risen 16.8%. Image Source: Zacks Investment Research Adobe stock is currently trading at a forward 12-month Price/Sales of 6.19X compared with the Computer and Technology sector's 6.6X. Adobe has a Value Score of C. Image Source: Zacks Investment Research The Zacks Consensus Estimate for ADBE's earnings is pegged at $20.63 per share for fiscal 2025, reflecting year-over-year growth of 12%. The consensus mark for earnings estimates for fiscal 2025 has been revised upward by 1.3% over the past 30 days. Image Source: Zacks Investment Research Adobe currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT) : Free Stock Analysis Report Autodesk, Inc. (ADSK) : Free Stock Analysis Report Adobe Inc. (ADBE) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Business Insider
10-07-2025
- Business
- Business Insider
Former Takeover Target Threatens Adobe's (ADBE) Clould Creativity Empire
Adobe (ADBE) is poised to encounter increased competitive pressure, partly of its own making. Figma, the cloud-based design platform that Adobe sought to acquire in 2023, is preparing for a $1.5 billion initial public offering (IPO). This move will enhance Figma's access to capital, providing critical support for its continued growth and market expansion. Don't Miss TipRanks' Half-Year Sale Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Notably, Adobe was required to pay a $1 billion breakup fee following the failed acquisition attempt. The timing of Figma's IPO is particularly significant, as Adobe's revenue growth has slowed from 15–25% in previous years to just 11%, contributing to recent pressure on its stock performance. Additionally, there is growing sentiment that generative artificial intelligence (AI) tools may be narrowing Adobe's competitive moat. However, Adobe remains proactive in defending its leadership in the creative software space, leveraging its innovation capabilities and extensive ecosystem. Given the balance of emerging risks and potential opportunities, I maintain a Neutral outlook on ADBE. Figma's Ascent: A Formidable Competitor Emerges Figma officially filed for its IPO with the SEC via an S-1 registration statement earlier this month, marking a significant milestone for the fast-growing design platform. Its business is thriving—revenue surged 48% to $749 million in fiscal year 2024, with first-quarter revenue rising 46% year-over-year to $228.2 million. A net dollar retention rate of 132% reflects strong customer loyalty and product engagement. Adobe's interest in acquiring Figma in 2022 now seems even more justified. However, the deal was terminated a year later amid regulatory antitrust concerns, resulting in a $1 billion breakup fee paid to Figma. This infusion of capital further strengthened Figma's ability to scale independently. Best known for its browser-based, real-time collaboration tools, Figma has since expanded into adjacent offerings, including Figma Sites (no-code website creation), Figma Make (AI-driven code generation), and Figma Draw (vector editing)—many of which directly compete with Adobe products, such as Illustrator. While Figma's scale is still modest compared to Adobe's 2024 revenue of $21.5 billion, it remains a formidable challenger in the creative software space. Its IPO is expected to accelerate its growth trajectory and broaden its market presence. AI Threatens to Democratize Creativity In addition to competitive pressure from platforms like Figma and Canva, the creative software industry is being rapidly reshaped by the rise of generative AI tools such as Midjourney, OpenAI's Sora, and RunwayML. These solutions are particularly valuable in the early 'ideation phase' of content creation and are widely accessible, with pricing ranging from $20 per month to $1,500 per year. Their growing influence on Adobe's traditional offerings is significant. Many argue that these tools are democratizing creative capabilities, lowering barriers to entry for individuals and small teams. With tens of billions of dollars being invested in AI innovation, even an industry leader like Adobe may find it increasingly challenging to maintain its competitive edge in this rapidly evolving landscape. Adobe's Counter-Offensive: Firefly and AI Integration That said, Adobe is actively incorporating AI to enhance its product offerings. At the center of its AI strategy is Firefly, a suite of generative tools that includes features such as generative fill and expand, AI-assisted workflows, and text-based editing. A key differentiator is Adobe's emphasis on the commercial safety of Firefly, positioning it as a more secure alternative to other generative AI tools—such as those from OpenAI—which have faced concerns around copyright and content sourcing. This focus on reliability and legal clarity appeals particularly to enterprise clients and established organizations that prioritize compliance and risk mitigation, even at a premium. Additionally, Firefly is integrated with major partners, including Google Cloud and OpenAI, expanding its reach and functionality within Adobe's ecosystem. Financial Fortitude: Adobe's Stable Foundation surpassing 37 million paid subscribers by the end of 2024, according to the most recent data sourced by TipRanks. Flagship products, such as Photoshop, continue to be widely adopted by creative professionals worldwide. From a financial standpoint, Adobe is performing exceptionally well. In the second quarter of fiscal year 2025, the company posted record revenue of $5.87 billion. Operating cash flow reached $2.19 billion, representing a robust margin of 37.3%. High margins remain a key strength for Adobe, with a free cash flow margin of 36.83%—significantly outperforming the Information Technology sector median of 11.66% by over 215%. Despite these strong fundamentals, Adobe trades at a relatively modest valuation. Its current Price-to-Earnings ratio of 24.3 is below the sector median of 29.19, suggesting that the market may be factoring in expectations of slower growth ahead. What is the Price Target for ADBE? On Wall Street, the consensus rating on ADBE is Moderate Buy based on 19 Buy, seven Hold, and two Sell ratings in the past three months. T he stock's average price target of $484.88 implies a 26% upside potential over the next twelve months. Following Adobe's fiscal second-quarter results, Citi lowered its price target on ADBE from $465 to $450 while maintaining a Hold rating. The firm acknowledged Adobe's initial progress in monetizing AI as encouraging but expressed caution, citing uncertainty around the sustainability of its AI-driven growth. Citi pointed to fluctuating pricing strategies in fiscal 2025 and what it described as a 'seemingly diminishing' market and mindshare for Adobe's AI models as key concerns. Adobe at a Crossroads: Maturing Growth Meets Rising AI Competition Adobe faces a range of challenges. Growth in the creative software market appears to be entering a mature phase, which has weighed on investor sentiment and stock performance. The market no longer prices ADBE as a high-growth stock; its P/E ratio—once consistently around 50 since 2015—has been roughly halved. The failed acquisition of Figma may also have long-term competitive implications. Additionally, the rise of generative AI tools poses a threat to Adobe's moat, particularly among individual creators and small to mid-sized businesses. That said, Adobe remains a highly profitable enterprise and a trusted leader in the creative software market, which is projected to grow at a 7.1% annual rate. The company's efforts to adapt—highlighted by its AI-driven Firefly platform—demonstrate its commitment to innovation and relevance in a rapidly evolving landscape. Combined with a more reasonable valuation, these strengths make it challenging to adopt an overly bearish stance. All things considered, my outlook on ADBE is Neutral.
Yahoo
08-07-2025
- Business
- Yahoo
Can Adobe Stock Hit $660 in 2025?
Software giant Adobe (ADBE), best-known for game-changing tools like Photoshop and Acrobat, has fallen out of favor with investors. Once a darling of the tech world, ADBE stock has slumped this year, weighed down by intensifying competition, concerns over its subscription-heavy model, and growing doubts about whether the company is truly keeping up in the fast-moving artificial intelligence (AI) race. To its credit, Adobe hasn't been sitting idle. The company has entered the AI arena with tools like Firefly, signaling a bold push to stay ahead of the curve and prove it's a major player in the creative tech space. Still, rival platforms like Canva are closing in fast. Investors are growing increasingly wary of whether Adobe can successfully turn its AI investments into real profits. This Analyst Just Raised His Broadcom Stock Price Target by 70%. Should You Buy AVGO Now? Why Alibaba Stock Looks Like a Screaming Buy After Falling 27% From Its 2025 Highs 2 ETFs Offering Juicy Dividend Yields of 20% or Higher Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! While AI holds huge potential, it also opens the door to fresh competition, threatening Adobe's long-held pricing power and enviable margins. Even so, not all hope is lost on Wall Street. DBS, for one, remains firmly in the bullish camp. The firm recently reaffirmed its 'Buy' rating, setting a Street-high price target of $660. Can Adobe overcome the hurdles and reclaim its momentum in time to hit that lofty target by the end of 2025? Valued at a market capitalization of roughly $160 billion, California-based Adobe is now laser-focused on writing its next chapter with AI. At the heart of this shift is Firefly, its generative AI platform that turns simple prompts into stunning content while keeping IP protection front and center. Seamlessly integrated into Creative Cloud, Firefly is reshaping workflows and attracting fresh users. In fact, Adobe took a bold step into mobile AI last month with the launch of its Firefly smartphone app. Available on iOS and Android, the app combines Adobe's own AI model with those from OpenAI and Google (GOOGL), bringing powerful, on-the-go creative tools to users' fingertips. While Adobe's AI ambitions may be growing, ADBE stock has been moving in the opposite direction, weighed down by fierce competition in the generative AI space. Over the past year, shares have tumbled a notable 35%, heavily underperforming the broader S&P 500 Index's ($SPX) 12% return during the same stretch. The slump has continued within 2025, with Adobe down 15% year-to-date (YTD) compared to the broader market's steady climb of almost 6%. As competition in the AI space intensifies, investors appear to be waiting for stronger evidence that Adobe's strategy will deliver meaningful returns. While the stock isn't exactly cheap, Adobe's valuation has certainly pulled back sharply from its historical highs, now trading at 22 times forward earnings and 7.5 times sales. Although the drop reflects investor caution amid mounting AI competition and execution risks, it could also signal a potential rebound opportunity if the firm proves it can turn its AI investments into sustainable growth. Adobe released its fiscal 2025 second-quarter earnings report on June 12, exceeding Wall Street's top- and bottom-line projections. The company posted a record $5.9 billion in quarterly revenue, an 11% year-over-year (YOY) increase that edged past Wall Street's $5.8 billion forecast. Adobe wrapped up the quarter with a hefty backlog, locking in roughly $19.7 billion in Remaining Performance Obligations (RPO), a clear sign of strong demand and solid revenue visibility ahead. Earnings didn't disappoint either, with adjusted EPS of $5.06 rising 13% from the prior year and topping estimates for $4.96 per share. Adobe's core business segments continue to show solid momentum. Digital Media revenue climbed 11% YOY to $4.4 billion, fueled by steady demand for its creative and document solutions. Annualized recurring revenue (ARR) for this segment also saw a healthy 12.1% boost, reaching $18.1 billion. Meanwhile, Digital Experience revenue shot up 10% to $1.5 billion, with subscription revenue in that segment growing 11% to $1.3 billion. Adobe's leadership sees AI as a game-changer across its customer base. CEO Shantanu Narayen, for instance, emphasized that the company's AI innovations are transforming industries and unlocking new levels of creativity for individuals and businesses alike. CFO Dan Durn echoed that view, noting that continued investment in AI is not only boosting performance but also expanding Adobe's reach across diverse customer segments. Riding on a solid first-half performance, Adobe has raised the bar for its full-year outlook. The company now expects fiscal 2025 revenue to land between $23.5 billion and $23.6 billion, slightly above its previous range. Adobe also raised its adjusted EPS forecast for the entire year to a range of $20.50 to $20.70. Adobe may be under pressure, but Wall Street's outlook remains somewhat optimistic, with analysts holding a consensus 'Moderate Buy' rating overall. Of the 34 analysts offering recommendations, 23 advocate for a solid 'Strong Buy,' two suggest a 'Moderate Buy,' eight play it safe with 'Hold,' and the remaining analyst gives a 'Strong Sell" rating. The average analyst price target of $494.73 indicates 26% upside potential from current levels, but DBS' ambitious Street-high target of $660 suggests that ADBE stock can rally as much as 75%. Adobe is clearly in a transition phase, navigating the challenges of a competitive AI landscape while working to prove its innovation still packs a punch. The company is making meaningful strides with tools like Firefly and strong integration across its platforms, but ADBE stock's recent slump shows that investors are still waiting for more convincing results. That said, Adobe's latest earnings show solid business momentum, and its raised guidance suggests growing confidence from within. With its valuation now well below historical levels, there could be room for a rebound, especially if the company can turn its AI push into tangible growth. The $660 target is certainly ambitious, but with the right execution, it remains within the realm of possibility. On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. 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Yahoo
05-07-2025
- Business
- Yahoo
With 85% institutional ownership, Adobe Inc. (NASDAQ:ADBE) is a favorite amongst the big guns
Institutions' substantial holdings in Adobe implies that they have significant influence over the company's share price 47% of the business is held by the top 25 shareholders Insiders have been selling lately This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. A look at the shareholders of Adobe Inc. (NASDAQ:ADBE) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 85% ownership. Put another way, the group faces the maximum upside potential (or downside risk). Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait. Let's delve deeper into each type of owner of Adobe, beginning with the chart below. See our latest analysis for Adobe Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing. As you can see, institutional investors have a fair amount of stake in Adobe. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Adobe, (below). Of course, keep in mind that there are other factors to consider, too. Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Adobe. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 9.7%. BlackRock, Inc. is the second largest shareholder owning 9.5% of common stock, and State Street Global Advisors, Inc. holds about 4.8% of the company stock. On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest. Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily. While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO. Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances. Our information suggests that Adobe Inc. insiders own under 1% of the company. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own US$269m worth of shares (at current prices). Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling. The general public-- including retail investors -- own 15% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders. While it is well worth considering the different groups that own a company, there are other factors that are even more important. I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph. If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
04-07-2025
- Business
- Yahoo
Why Adobe Systems (ADBE) is a Top Growth Stock for the Long-Term
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum. Growth investors build their portfolios around companies that are financially strong and have a bright future, and the Growth Style Score helps take projected and historical earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth. San Jose California-based Adobe Inc. is a leading technology company offering personalized digital experience through the infusion of artificial intelligence (AI) in its solutions. ADBE boasts a Growth Style Score of B and VGM Score of B, and holds a Zacks Rank #2 (Buy) rating. Its bottom-line is projected to rise 11.9% year-over-year for 2025, while Wall Street anticipates its top line to improve by 9.5%. 14 analysts revised their earnings estimate upwards in the last 60 days for fiscal 2025. The Zacks Consensus Estimate has increased $0.24 to $20.61 per share. ADBE boasts an average earnings surprise of 2.5%. On a historic basis, Adobe Systems has generated cash flow growth of 13.7%, and is expected to report cash flow expansion of 11.9% this year. Investors should take the time to consider ADBE for their portfolios due to its solid Zacks Rank rating, notable growth metrics, and impressive Growth and VGM Style Scores. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Adobe Inc. (ADBE) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
