Adobe: The New PayPal Or The Next Google?
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James FoordInvesting Group LeaderFollow5ShareSavePlay(9min)CommentsSummaryAdobe Inc. just delivered double-digit revenue growth, rising ARR, and expanding AI adoption, yet trades at a compressed multiple as investor sentiment sours.ADBE's Q4 revenue reached $6.19B (+10% YoY), non-GAAP EPS $5.50 (+14%), and operating cash flow exceeded $10B, with over $12B in share repurchases.AI-influenced ARR now exceeds one-third of the total, generative credit consumption tripled QoQ, and enterprise AI deals hit records, signaling robust AI monetization.With ARR growth above 10%, 45% margins, and disciplined capital returns, ADBE stock’s valuation appears compelling for patient investors despite competitive and disruption risks. Andrii Yalanskyi/iStock via Getty Images Thesis Summary Adobe Inc. (ADBE) just delivered another strong quarter, posting double-digit revenue growth, rising ARR, and expanding AI adoption. Yet the market is increasingly treating Adobe like a mature, ex-growth incumbent and assigning itThis article was written byJames Foord26.22K FollowersFollowJames Foord is an economist by trade and has been analyzing global markets for the past decade. He leads the investing group The Pragmatic Investor where the focus is on building robust and truly diversified portfolios that will continually preserve and increase wealth.
The Pragmatic Investor covers global macro, international equities, commodities, tech and cryptocurrencies and is designed to guide investors of all levels in their journey. Features include a The Pragmatic Investor Portfolio, weekly market update newsletter, actionable trades, technical analysis, and a chat room. Learn more.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in ADBE over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You