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Adobe Inc ADBE

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Picture-Perfect Quarter for Adobe; FVE Up to $569

Dan Romanoff, CPA Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

Wide-moat Adobe reported strong second-quarter results, including upside to guidance for revenue and non-GAAP EPS, and provided a better-than-expected third-quarter outlook. Management did not raise full-year guidance but was enthusiastic about exceeding its previously issued 2021 outlook. We see strength in all segments and all geographies regarding quarterly results and are pleased to see continued strength in the digital experience, or DX, segment. SMB performance is back to prepandemic levels in the U.S. and improving globally as well. We think results continue to support our investment case that Adobe will continue to dominate the creative segment, and its well-rounded portfolio, including Magento and Marketo, positions the firm as a digital marketing leader. Given results and guidance, we are raising our fair value estimate to $569 per share from $520. Given the stock’s run year to date, we see shares as fairly valued.

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Company Profile

Business Description

Adobe provides content creation, document management, and digital marketing and advertising software and services to creative professionals and marketers for creating, managing, delivering, measuring, optimizing and engaging with compelling content multiple operating systems, devices and media. The company operates with three segments: digital media content creation, digital experience for marketing solutions, and publishing for legacy products (less than 5% of revenue).

Contact
345 Park Avenue
San Jose, CA, 95110-2704
T +1 408 536-6000
Sector Technology
Industry Software - Infrastructure
Most Recent Earnings Feb 28, 2021
Fiscal Year End Nov 27, 2021
Stock Type Aggressive Growth
Employees 22,516

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