Latest news with #AdobeSystems
Yahoo
4 days ago
- Business
- Yahoo
This Growth Stock Is Down 13% in 2025. Should You Buy the Dip?
The S&P 500 Index ($SPX) is hitting new all-time highs, putting tariff uncertainty, recession fears, and geopolitical turmoil on the back burner. Tech stocks have also participated in the rally with a few exceptions. Adobe Systems (ADBE), for instance, is down 13% for the year as of this writing. The stock's underperformance is not unique to 2025. It lost a quarter of its market capitalization last year, missing out on the tech rally. ADBE trades nearly 45% lower than its all-time high and has been out of favor with the market for quite some time now. Dear Nvidia Stock Fans, Watch This Event Today Closely 3 ETFs Offering Juicy Dividend Yields of 15% or Higher A $2 Billion Reason to Sell Super Micro Computer Stock Now Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. To be sure, Adobe is no longer the kind of growth story it once was, and its revenues are expected to grow by less than 10% each in 2025 and 2026. The stock's valuations have also adjusted to the kind of growth Adobe is delivering. However, are the valuations now at a level where Adobe enters the 'buy' zone? Let's discuss. To begin with, let's analyze why Adobe stock has sagged. Firstly, the company is facing intense competition, particularly from Canva, whose paid users are now over half of Adobe Creative Cloud. Adobe tried acquiring Figma, which is its competitor in collaborative design tools and UX/UI design, but had to abandon that deal as it failed to get regulatory clearances. Markets are also apprehensive about the company's ability to monetize its artificial intelligence (AI) investments. Notably, AI is both an opportunity and a threat for Adobe as new competitors could put pressure on its pricing power, putting its juicy margins at risk. In hindsight, it seems Adobe management wasn't prudent with its capital allocation and spent aggressively on buybacks. While it still has a formidable balance sheet, the company repurchased shares at a much higher price than what they currently stand at. But it's not all over for Adobe. The company boasts significant recurring revenues through subscriptions. It reported digital media annualized recurring revenue (ARR) of $18.09 billion at the end of the quarter ending May, with the number rising 12.1% compared to the same time last year. The company expects its ARR book to rise 11% in the current fiscal year, which looks quite decent even as the growth has arguably come down. Among others, Firefly has helped expand the company's ecosystem. During its fiscal Q2 earnings call, Adobe said that the app is attracting new users to its franchise, and its subscribers rose 30% in the quarter. Adobe's gross margins are nearly 90% while adjusted operating margins are in the mid-40s, which is quite healthy. The company's subscription-based business helps it post fat margins, and historically, the stock has traded at a premium to broader markets given its business model. Overall, of the 34 analysts covering Adobe stock, 23 have a 'Strong Buy' rating while two rate it as a 'Moderate Buy.' The remaining nine analysts rate the stock as a 'Hold' or some equivalent. Adobe stock trades slightly above its Street-low target price of $380, while the mean target price of $499.40 implies upside potential of nearly 30%. Analyst action following Adobe's fiscal Q2 2025 earnings release was quite mixed. While some analysts raised their target price after a strong report where the company beat on all key metrics, others cut their target price. Adobe's outlook was perhaps best summed up by CFRA Research analyst Angelo Zino, who lowered his target price from $575 to $500. In his note, Zino said, 'Still, at near historical-low valuations and given its highly recurring business model and attractive margins, we think shares offer an enticing risk/reward opportunity, but investors may need to be patient due to limited catalysts.' Adobe's valuations have corrected amid the slowing growth and concerns over competitive pressure. It currently trades at almost 20x its expected EPS in the fiscal year 2026, which would end in November 2026. I believe the valuations are quite comfortable at these levels, even after pricing in the headwinds. Concerns over the company losing out to new startup rivals might be a bit overblown, and I find the stock's risk-return as reasonably attractive here, even as they are not mouthwatering, and the chances of an immediate re-rating look bleak. Overall, Adobe is one growth stock that I will keep on my radar, and would consider adding positions if the stock sees more downward pressure. On the date of publication, Mohit Oberoi 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. This article was originally published on Sign in to access your portfolio
Yahoo
5 days ago
- Business
- Yahoo
Adobe (ADBE) Q2 Earnings: How Key Metrics Compare to Wall Street Estimates
For the quarter ended May 2025, Adobe Systems (ADBE) reported revenue of $5.87 billion, up 10.6% over the same period last year. EPS came in at $5.06, compared to $4.48 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $5.79 billion, representing a surprise of +1.50%. The company delivered an EPS surprise of +2.02%, with the consensus EPS estimate being $4.96. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Adobe performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Business Unit - Digital Media - Total Digital Media ARR (Annual): $18.09 billion versus $18 billion estimated by four analysts on average. Revenue- Digital Media: $4.35 billion versus the seven-analyst average estimate of $4.27 billion. The reported number represents a year-over-year change of +11.3%. Revenue- Publishing and Advertising: $70 million compared to the $66.41 million average estimate based on seven analysts. The reported number represents a change of -5.4% year over year. Revenue- Digital Experience: $1.46 billion compared to the $1.44 billion average estimate based on seven analysts. The reported number represents a change of +10% year over year. Revenue- Services and other: $144 million versus $145.74 million estimated by six analysts on average. Compared to the year-ago quarter, this number represents a -0.7% change. Revenue- Subscription: $5.64 billion versus the five-analyst average estimate of $5.55 billion. The reported number represents a year-over-year change of +11.5%. Revenue- Products: $88 million compared to the $102.79 million average estimate based on five analysts. The reported number represents a change of -15.4% year over year. Revenue- Subscription Revenue- Digital Experience: $1.33 billion versus $1.32 billion estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +10.5% change. Revenue- Subscription Revenue- Digital Media: $4.28 billion compared to the $4.18 billion average estimate based on two analysts. The reported number represents a change of +11.8% year over year. Revenue- Subscription Revenue- Publishing and Advertising: $27 million versus $28.81 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -3.6% change. View all Key Company Metrics for Adobe here>>>Shares of Adobe have returned -7.5% over the past month versus the Zacks S&P 500 composite's +5.1% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. 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 Sign in to access your portfolio
Yahoo
24-06-2025
- Business
- Yahoo
Adobe (ADBE) is an Incredible Growth Stock: 3 Reasons Why
Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. But finding a great growth stock is not easy at all. In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end. However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects, makes it pretty easy to find cutting-edge growth stocks. Adobe Systems (ADBE) is on the list of such stocks currently recommended by our proprietary system. In addition to a favorable Growth Score, it carries a top Zacks Rank. Research shows that stocks carrying the best growth features consistently beat the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy). While there are numerous reasons why the stock of this software maker is a great growth pick right now, we have highlighted three of the most important factors below: Arguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. For growth investors, double-digit earnings growth is highly preferable, as it is often perceived as an indication of strong prospects (and stock price gains) for the company under consideration. While the historical EPS growth rate for Adobe is 14%, investors should actually focus on the projected growth. The company's EPS is expected to grow 11.8% this year, crushing the industry average, which calls for EPS growth of 11.5%. While cash is the lifeblood of any business, higher-than-average cash flow growth is more important and beneficial for growth-oriented companies than for mature companies. That's because, growth in cash flow enables these companies to expand their businesses without depending on expensive outside funds. Right now, year-over-year cash flow growth for Adobe is 11.9%, which is higher than many of its peers. In fact, the rate compares to the industry average of 9.4%. While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 13.6% over the past 3-5 years versus the industry average of 10.5%. Beyond the metrics outlined above, investors should consider the trend in earnings estimate revisions. A positive trend is a plus here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements. There have been upward revisions in current-year earnings estimates for Adobe. The Zacks Consensus Estimate for the current year has surged 2.1% over the past month. Adobe has not only earned a Growth Score of A based on a number of factors, including the ones discussed above, but it also carries a Zacks Rank #2 because of the positive earnings estimate revisions. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. This combination indicates that Adobe is a potential outperformer and a solid choice for growth investors. 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
Yahoo
16-06-2025
- Business
- Yahoo
Wall Street Analysts See Adobe (ADBE) as a Buy: Should You Invest?
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though? Let's take a look at what these Wall Street heavyweights have to say about Adobe Systems (ADBE) before we discuss the reliability of brokerage recommendations and how to use them to your advantage. Adobe currently has an average brokerage recommendation (ABR) of 1.74, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 34 brokerage firms. An ABR of 1.74 approximates between Strong Buy and Buy. Of the 34 recommendations that derive the current ABR, 21 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 61.8% and 5.9% of all recommendations. Check price target & stock forecast for Adobe here>>> While the ABR calls for buying Adobe, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential. Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation. This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements. With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision. Although both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether. Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5. Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide. On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns. Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements. In terms of earnings estimate revisions for Adobe, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $20.36. Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Adobe. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Adobe. 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
New York Post
16-06-2025
- Business
- New York Post
Media, ad execs and celebs return to Cannes Lions
It's that time of year again when the mega-yachts of titans of media, tech and advertising drop anchor in the Mediterranean Sea, where the industry's biggest names will convene in the glitzy French seaside town of Cannes to make deals and debate the industry's biggest issues. The rosé and champagne-infused week-long event, known as the Cannes Lions International Festival of Creativity, is roaring back this week for its 72nd year – and boasting over 12,000 attendees from over 97 countries, including a heavy-hitting list of top execs, celebs and athletes. 'These are the biggest numbers they've ever had,' said 3CV founder Michael Kassan, who has not only been going to Cannes Lions for over 25 years, but is also instrumental in shaping it into what the event has become. Advertisement 9 The VIP dinner party hosted by iHeartMedia and MediaLink at Hotel du Cap-Eden-Roc during the Cannes Lions Festival in 2023 in Cap d'Antibes, France. Getty Images for iHeartMedia 'You have the agencies, you have the brands, you have the creatives, you have the media side and the platforms,' he said. That's why you get the buzz and that's why Cannes is a must-attend event. I'm not saying it's immune to economic pressures and the like but the numbers for Cannes Lions are through the roof [this year].' The self-proclaimed grand poobah of the illustrious event rattled off a slew of top names in media who will be at this week's event, including Amazon CEO Andrew Jassy, newly named Instacart CEO Chris Rogers and Disney Entertainment co-chair Dana Walden, who is in the running for the top job when Mouse House CEO Bob Iger is slated to step down in late 2026. Advertisement 9 Adobe Systems CEO Shantanu Narayen will grab the Creative Champion of the Year award at Cannes Lions. AP Headlining speakers for the five-day fest, which starts Monday, include Adobe Systems CEO Shantanu Narayen, who will grab the Creative Champion of the Year award, as well as YouTube CEO Neal Mohan tennis star and entrepreneur Serena Williams, NFL player and Taylor Swift beau Travis Kelce, actress and Hello Sunshine founder Reese Witherspoon and 'Tonight Show' host Jimmy Fallon. Despite the strong attendance, the economy will be top of mind for execs, who are grappling with how to deal with President Trump's looming tariffs, a tepid mergers and acquisition environment and uncertainty about how the implementation of artificial intelligence will impact the advertising industry. 'I might have a bit of a hot take on the economy,' said Yahoo Chief Revenue Officer Rob Wilk.'If you look at what you read, it seems way more gloomy than what I experience day to day.' Advertisement 9 Tennis legend and entrepreneur Serena Williams will speak at the media and advertising conference. AFP via Getty Images Wilk. whose media company is celebrating its 30th anniversary this year, said that the advertisers are 'holding on to dry powder' and waiting to spend versus 'slashing budgets and pulling back' and that he's seeing that same caution reflected in dealmaking, due in part to the tariff conversation. He said M&A deals will only happen if they're an 'accretive acquisition,' giving the example of Yahoo's April acquisition of Artifact, the AI-driven news aggregation app from Instagram cofounders Kevin Systrom and Mike Krieger. 3CV's Kasan said he expects the M&A environment to heat up later once two major deals close. He cited the $13.25 billion merger between ad giant Omnicom and Interpublic, which is expected to close later this year, and Skydance Media's $8 billion acquisition of Paramount Global. Advertisement 9 NFL star and Taylor Swift beau Travis Kelce is returning to Cannes this year, as the festival continues to lean into the topics of sports media. Erik Messori for NY Post CBS-parent Paramount is currently embroiled in talks to settle President Trump's $20 billion lawsuit against '60 Minutes' over the editing of its sitdown with former Vice President Kamala Harris. The legal settlement will be key for the deal to move forward, according to media experts. 'I do think the M&A landscape and entertainment will get a little busy once the Paramount deal is done,' Kassan said, noting that Cannes will be a hot bed for dealmaking and conversations about how to grow businesses. 9 Media execs and ad titans will explore how artificial intelligence, influencer marketing and retail media can boost their businesses. Getty Images for iHeartMedia This year, execs will be focused on four top issues that can drive revenue; artificial intelligence, commerce, creators and sports media, he said, adding that his new company 3CV will be hosting talks on these themes throughout the week at Plage 3CV on the Croisette. 'AI is everything, everywhere all at once,' he said with a laugh. Christopher Vollmer, managing director of MediaLink and partner at UTA agreed, explaining that the 'conversations around AI have shifted from can AI create something interesting to how do we create AI responsibly, distinctively and at scale?' 9 Cannes will soon be flooded with mega-yachts as elites from tech, media and advertising descend on the seaside town. Ella Pellegrini for NY Post Advertisement 'It's more about a pragmatic application of AI versus a 'gee whiz' reaction,' he said, adding that chief financial officers of companies are pushing their marketing heads to spend efficiently and do more with less money. 'The ability to do that – with the advancements in data, technology, etcetera— reinforces that it is possible to do more with less every year,' he said. 'There's a real focus on what price performance, what marketing investments of any kind can be tied to return on investment.' Retail or commerce media has become a huge focus for brands looking for growth. He pointed to Amazon– which will have a strong presence once again at Lions– as leading the charge in its value-proposition to partners. 'Amazon's whole proposition is 'we know what you watch and we know what you buy,'' he said, adding that the e-commerce giant is driving a convergence across content, advertising, commerce and shopping. Advertisement 9 Sports Beach will return this year and welcome a slew of athletes once again. Erik Messori for NY Post 'It's not just the big giants anymore,' said Lauren Wiener, Global lead of the marketing, sales and pricing practice of the Boston Consulting Group.'New players and category leaders are turning commerce data into media engines and redefining how advertisers reach consumers.' Wiener added that chief marketing officers are 'reshaping' how they spend, 'not retreating,' and this is taking the form of 'doubling down' on areas that unlock both efficiency and growth while slashing costs and legacy business models. Brand building is also central to any marketer's agenda, and that the importance of sports media and creators/ influencers have exploded in recent years due in part to, its ability to reach younger audiences. Advertisement Professional athletes will take center stage at events held by Axios, Medialink, Deep Blue Sports and Stagwell with its impressive Sports Beach complex, addressing a variety of topics from the creator economy, AI, mental health, style and how to support female athletes. 9 'Tonight Show' host Jimmy Fallon will take to Cannes Lions this year and talk about how his viral comedy segments have help draw in new viewers and advertisers. Todd Owyoung/NBC via Getty Images Cannes will welcome NBA all-star Carmelo Anthony, WNBA champion Sue Bird, former NFL star Chad 'Ochocinco' Johnson, former Yankee slugger Alex Rodriguez and soccer stars Alex Morgan and Megan Rapinoe, among others. Brands have leaned on athletes because they have become as important as traditional entertainment franchises due to their popularity and ability to drive engagement with consumers. Advertisement Pointing to the NBA finals, Josh Rosenberg, CEO of creative communications firm, Day One Agency said fans across the country are 'really lit up.' 'I think it is perfect for storytelling,' he said, referring to the finals. 'Everyone is rooting for their person and I think that in this day and age, it is what is uniting large groups of people – and also this is one of the only times that audiences are tuned in at the same time to the same things.' Rosenberg touted the rise in popularity of women's sports and sports overall, as a way to also reach younger audiences. 9 Cannes is expected to welcome over 12,000 attendees to Cannes Lions this year. Ella Pellegrini 'There are all these new personalities that have their own social media followings and platforms and communities that fans are really engaged with, which are prime opportunities for a brand to capitalize on and for them to support athletes on their journey,' he said. According to Harry Kargman, CEO of mobile brand and ad agency Kargo, working with creators can help brands expand their reach but it's imperative to have a diversified, measurable and targeted marketing strategy. Working with influencers can be tricky because it's almost impossible to measure the power of their reach, unlike with targeted ads, but he said it can be worth it for a brand if they're looking to reach new customers. 'I think influencers unlike other places- if they build the right content around a brand or around the brand message and if they have authenticity- it can be extraordinarily effective,' Kargman said, 'It's like close to word of mouth but it's word of mouth to hundreds of thousands, if not millions of followers.'
