With a market cap of $190.9 billion, Adobe Inc. (ADBE) is a global technology company that provides software solutions through three segments: Digital Media, Digital Experience, and Publishing and Advertising. Its flagship product, Creative Cloud, offers a subscription-based suite of creative tools, while its Digital Experience platform helps businesses optimize customer engagement.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Adobe fits this criterion perfectly. Headquartered in San Jose, California, Adobe generates revenue primarily through licensing fees and cloud-based services.
However, the creative software products maker has dipped 25.4% from its 52-week high of $587.75, reached in September last year. Over the past three months, shares of ADBE have declined 14.6%, which lags behind the iShares Expanded Tech-Software Sector ETF's (IGV) 6.6% drop during the same period.
In the longer term, shares of Adobe have declined 20.5% over the past 52 weeks, underperforming IGV’s 14.1% return over the same time frame. However, ADBE has dipped 1.4% on a YTD basis, which is less pronounced than IGV’s 2.7% decrease.
Since December, last year, ADBE stock has been trading below its 50-day and 200-day moving averages, indicating a bearish trend.
Despite Adobe reporting better-than-expected Q4 2024 adjusted EPS of $4.81 and revenue of $5.6 billion on Dec. 11, its shares tumbled 13.7% the next day due to a disappointing fiscal 2025 outlook. The company’s Q1 2025 revenue guidance of $5.6 billion - $5.7 billion missed the consensus estimate, while full-year revenue guidance of $23.3 billion - $23.6 billion fell short of the expectation. Additionally, Adobe warned that currency headwinds and the ongoing shift from perpetual to subscription-based models would reduce FY25 revenue by $200 million.
In comparison with its rival, Salesforce, Inc. (CRM) has fallen 10.9% YTD, a steeper decline than Adobe’s drop. But, over the past year, CRM has experienced a marginal dip compared to ADBE’s decline.
Despite the stock’s weak performance, analysts are moderately optimistic about its prospects. ADBE has a consensus rating of “Moderate Buy” from the 34 analysts covering the stock, and it is currently trading below the mean price target of $568.84.
On the date of publication, Sohini Mondal 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. For more information please view the Barchart Disclosure Policy here.
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