• Investing
  • Stock
  • Economy
  • Editor’s Pick
Portfolio Performance Today
Stock

Adobe stock price is cheap: is it a good buy?

by June 1, 2025
by June 1, 2025

Adobe stock price has underperformed the broader market and other companies in the software-as-a-service (SaaS) industry like Microsoft, ServiceNow, and Salesforce. It has dropped by over 35% from its highest point last year as concerns about competition and impact of artificial intelligence (AI) remain. 

Competition, AI, and growth concerns

The Adobe share price has come under pressure in the past few months as the company faces a mountain of challenges.

Its biggest challenge is competition from companies like Canva and Figma, which have become multibillion-dollar firms. Canva has a valuation of almost $50 billion, while the recent fundraising placed Figma’s valuation at over $12 billion.

These firms have become big names because of their investments in easy-to-use solutions, emphasis on collaboration, and artificial intelligence services. 

Adobe stock price has also dropped as AI tools disrupt some of its solutions. While the company has invested in AI tools, investors are yet to see the impact in terms of revenue and profitability. 

Analysts and investors are concerned about the impact of AI on some of its services like Photoshop and Dreamweaver. Dreamweaver, which simplifies the website design process, is being disrupted by AI tools like ChatGPT and Grok that can build a website from scratch after a few prompts.

Adobe stock price has also underperformed because of an FTC lawsuit that alleges the company hid fees and prevented customers from cancelling its software easily. 

Further, there are concerns about Adobe’s growth. Its last annual revenue rose to $21.5 billion, up from $19.4 billion.

The most recent numbers showed that Adobe’s revenue rose by 10% in the first quarter to $5.71 billion. Its operating income rose to $2.16 billion, while its cash flow from operations rose to $2.48 billion.

Most of Adobe’s revenue came from the digital media segment, which made $4.23 billion. This business includes the Creative Cloud and Document Cloud businesses, including services like InDesign, Illustrator, and Photoshop. 

The digital experience business includes services like Marketo, Adobe Target, , Journey Optimizier, and Adobe Campaign. 

Read more: Adobe stock price triangle pattern points to big moves ahead

ADBE earnings and valuation

The next key catalyst for the Adobe stock price will be its earnings, which will come out in June. 

Wall Street analysts anticipate that the revenue rose by 9.2% in the first quarter to $5.8 billion. The most optimistic analyst sees its revenue coming in at almost $6 billion.

Analysts also expect that its second-quarter revenue will be $5.8 billion, a 8.65% increase. The annual revenue is expected to be $23.46 billion and $25.72 billion, respectively. 

Analysts also believe that Adobe stock price is cheap. The average stock forecast is $488, up from the current $380. 

It has a net income and a free cash flow margin of 30% and 37%, and an annual growth rate of about 10%. This gives it a rule of 40 metric in the range of 40% and 47%, making it fairly valued. 

Adobe stock price analysis

ADBE chart | Source: TradingView

The daily chart shows that the ADBE share price bottomed at $332.98 in April and then bounced back to over $400 today. It has moved above the upper side of the descending channel.

The stock has formed a bullish flag pattern and moved above the 50-day and 100-day moving averages. The most likely scenario is where the Adobe share price rebounds and hits the psychological point at $500, up by 20% from the current level.

The post Adobe stock price is cheap: is it a good buy? appeared first on Invezz

0 comment
0
FacebookTwitterPinterestEmail

previous post
UK’s digital banks face divergent fortunes: Starling stumbles, Monzo and Revolut soars
next post
Consolidation in the markets

Related Posts

Trump’s tariff gamble on chips and drugs could...

August 6, 2025

OpenAI to release Open-Weight models: what they are...

August 6, 2025

AMD poised for strong Q2 as Wall Street...

August 6, 2025

Generative AI begins to reshape the US labor...

August 6, 2025

Here’s why the AMD stock price crashed after...

August 6, 2025

Asian markets open: Japan’s Nikkei falls 0.12%, Sensex...

August 6, 2025

India’s IPO frenzy: why companies are rushing to...

August 6, 2025

Coal-fired power declines as India leverages inventories

August 6, 2025

Europe markets open: Equities gain; focus on earnings,...

August 6, 2025

Honda Q1 operating profit halves, hit by Trump...

August 6, 2025

Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.

By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

Recent Posts

  • Fed Governor’s Labor Market Warning Validated by BLS Revision

    August 6, 2025
  • War on Words: The ‘Free Speech Recession’ Is Not Over

    August 6, 2025
  • Spontaneous Order Created Stablecoins — How Did Regulating Them Become a Strategic Consensus?

    August 6, 2025
  • War on Words: The ‘Free Speech Recession’ Is Not Over

    August 6, 2025
  • Spontaneous Order Created Stablecoins — How Did Regulating Them Become a Strategic Consensus?

    August 6, 2025
  • Trump’s tariff gamble on chips and drugs could change everything

    August 6, 2025

Editors’ Picks

  • 1

    Meta executives eligible for 200% salary bonus under new pay structure

    February 21, 2025
  • 2

    Walmart earnings preview: What to expect before Thursday’s opening bell

    February 20, 2025
  • 3

    New FBI leader Kash Patel tapped to run ATF as acting director

    February 23, 2025
  • 4

    Anthropic’s newly released Claude 3.7 Sonnet can ‘think’ as long as the user wants before giving an answer

    February 25, 2025
  • 5

    Nvidia’s investment in SoundHound wasn’t all that significant after all

    March 1, 2025
  • 6

    Cramer reveals a sub-sector of technology that can withstand Trump tariffs

    March 1, 2025
  • 7

    Elon Musk says federal employees must fill out productivity reports or resign

    February 23, 2025

Categories

  • Economy (2,100)
  • Editor's Pick (206)
  • Investing (185)
  • Stock (1,404)
  • About us
  • Contact us
  • Privacy Policy
  • Terms & Conditions

Copyright © 2025 Portfolioperformancetoday.com All Rights Reserved.

Portfolio Performance Today
  • Investing
  • Stock
  • Economy
  • Editor’s Pick
Portfolio Performance Today
  • Investing
  • Stock
  • Economy
  • Editor’s Pick
Copyright © 2025 Portfolioperformancetoday.com All Rights Reserved.

Read alsox

US markets close in red as inflation...

June 12, 2025

OKX eyes US IPO as crypto stock...

June 23, 2025

Warren Buffett stepping down: analysts assess what...

May 6, 2025