ADBE

The firm said it sees an "achievable set-up" for Adobe into the fiscal Q3 earnings report, with potential for a beat and a guidance raise. Over the weekend, Jefferies analyst Brent Thill raised the price target on Adobe to $285 from $230 and maintained a ‘Hold’ rating on the shares as part of its fiscal Q3 earnings preview. Wall Street analysts expect the company to post revenue of $6.70 billion, an increase of nearly 12%, and EPS of $6.09. Adobe Inc. (ADBE) received a price target hike from Citi analyst Tyler Radke to $301 from $228 and a ‘Neutral’ rating ahead of its third-quarter (Q3) results expected on Sept. 10. The revised target implies an upside of more than 5% from its last close. See what 10M+ investors are talking about. Get the Stocktwits Daily Rip for what retail is watching right now, free to your inbox The firm said it sees an "achievable set-up" for Adobe in the fiscal Q3 earnings report, with potential for a beat and a guidance raise. However, the analyst said that Adobe has greater estimated risk into fiscal 2027. Over the weekend, Jefferies analyst Brent Thill raised the price target on Adobe to $285 from $230 and maintained a ‘Hold’ rating on the shares as part of its fiscal Q3 earnings preview. Jefferies expects results to be in line with expectations, given Adobe's focus on user acquisition and engagement versus monetization. It expects the company to reiterate its fiscal 2026 annual recurring revenue outlook. As per Koyfin data, ADBE shares have a 12-month price target of $274.37, implying a downside potential of about 4%. Of the 40 analysts covering the stock, 12 have a ‘Buy’ or higher rating on the shares, 23 have a ‘Hold’ rating and five have a ‘Sell’ or lower rating. Wall Street analysts expect the company to post revenue of $6.70 billion, an increase of nearly 12% compared to $5.99 billion posted in the previous comparable quarter. Earnings per share are expected to come in at $6.09, compared to $5.31 in Q3 of 2025. Adobe expects fiscal year 2026 revenue to reach between $26.5 billion and $26.6 billion, with EPS projected at $17.90 to $18.00. On Stocktwits, retail sentiment around ADBE stock was ‘bullish’ at the time of writing amid ‘normal’ message volumes. One user said, “$ADBE Undervalued + 10th September good numbers are expected.” Another user said, “$ADBE Easy 350+ after ER. If they announce a new CEO, we will see 400+.” ADBE stock is down more than 14% in 2026. For updates and corrections, email newsroom[at]stocktwits[dot]com. Aashika Suresh has no position in any of the stocks mentioned in this article. StockTwits' news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits. Related: Uber Reportedly Plans To Slash 10% Of Its Workforce — Wells Fargo Says The Move Could Unlock $580M In Cost Savings Uber Reportedly Plans To Slash 10% Of Its Workforce — Wells Fargo Says The Move Could Unlock $580M In Cost Savings Block’s Cash App Growth Is Strong But ‘Increasingly Credit-Led,’ Square Remains ‘Missing Second Engine,’ Scotiabank Says

Adobe stock trades well below the market on earnings, and the subscription book that has to produce the next set of them is one the company has chosen to grow more slowly. Adobe (ADBE) has lost 24.6% of its value over the trailing twelve months, though the shares have gained 24.7% over the past month. At 15.1 times trailing earnings against 23.3 for the S&P 500, it is priced well below the market it sits in. That multiple is measured against earnings Adobe has already banked. What produces the next round of earnings, however, is an annual recurring revenue pipeline management has intentionally throttled to expand top-of-funnel reach. Twice The Market's Margin, Two-Thirds Its Multiple The quality behind the discount is not in question: roughly twice the market's operating margin, for two-thirds its earnings multiple. On $25.2 billion of revenue over the trailing twelve months, Adobe turns 36.1% into operating profit where the S&P 500 turns 18.4%, and converts 41.6% into operating cash flow where the market converts 21.8%. Turning that much of revenue into cash is the kind of quality the Trefis High Quality Portfolio holds. What the multiple does not tell you is what Adobe is doing to the book behind it. Adobe Is Trading Subscription Growth For Freemium Reach By the company's own account, Adobe has deferred the Creative Cloud price changes it had planned for the second half of fiscal 2026, and is routing new users into free Firefly, Acrobat and Express journeys rather than predominantly into direct-to-paid ones. Management splits the resulting hit to annual recurring revenue about evenly between the deferred price changes and the freemium push. An analyst put that hit at roughly half a billion dollars of organic ARR, and management did not dispute it. The same guidance set the fiscal 2026 ARR growth target at 10.2%, a number that already includes an acquired book of business, even as it raised the full-year revenue and non-GAAP EPS targets on first-half strength and that same acquisition. The reach is showing up: Creative Freemium monthly active users went from 50 million to 90 million year over year, and AI-first ARR tripled to more than $500 million. Turning that reach into revenue is what management says plays out over 2027. What Has To Show Up In Fiscal 2027 The price therefore asks little of the business and a great deal of the plan, and the plan is being run with an interim finance chief in place and the board still searching for the next CEO. Adobe has also shown it can be repriced sharply: it fell 51% in the 2022 inflation shock against a 24% drop for the S&P 500 and 63% in the 2008 financial crisis against 53%, though in the 2020 crash it fell 26% against the index's 34%. What would make 15.1 times earnings worth paying is freemium users converting fast enough that organic ARR growth in fiscal 2027 clears fiscal 2026’s reported 10.2% target—a bar that required the Semrush acquisition to offset deferred price hikes; what would not is monthly active users climbing for another year without the ARR line following. Adobe's five-factor scorecard is the fastest way to see how the pieces of that case score today. Even A Franchise This Profitable Can Make You Wait A payback management puts in 2027 is a long stretch to sit through in one position. The Trefis High Quality Portfolio spreads waiting of that sort across a basket of businesses rather than a single company's timetable. That portfolio has a track record of outpacing the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000.

Adobe (NASDAQ: ADBE) trades at $264.02 as of this writing, about 29% below its 52-week high of $370.86. After that slide, the stock costs about 15 times the earnings it reported over the past year. It costs about 11 times the non-GAAP (adjusted) earnings management expects for the current fiscal year, and roughly 10 times what analysts project for the year after that. Multiples like these are what the market typically assigns to businesses whose profits have stopped growing, or are about to. Adobe grew revenue 13% last quarter, to a record. In other words, the price and the results disagree. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Is the creative software giant a business in decline, or one of the cheaper growth stocks in the market? Adobe's fiscal second quarter of 2026 (the period ended May 29) was the best in the company's history by revenue -- $6.62 billion, up 13% year over year, or 11% in constant currency. Growth was 11% in the year-ago quarter and 12% in this year's fiscal first quarter. Measured in constant currency, all three quarters grew 11% -- steady, not accelerating. The growth was broad, too. Subscription revenue from the company's business professionals and consumers group (the one built around Acrobat and other everyday productivity tools) rose 16% year over year, while subscription revenue from the larger creative and marketing professionals group grew 13%. Profits kept pace. Adjusted earnings per share came in at $5.96, up 18% year over year, alongside $4.25 per share on a GAAP basis. The recurring base kept building as well. Adobe exited fiscal Q2 with $27.1 billion in annualized recurring revenue (including about $480 million from newly acquired Semrush), and its remaining performance obligations (contracted revenue not yet recognized) stood at $22.3 billion. On the strength of the quarter, management raised its full-year targets for both revenue and adjusted earnings per share, and it said annualized recurring revenue from its artificial intelligence (AI)-first products tripled year over year, exceeding $500 million. And the company keeps shrinking its share count. Adobe generated $2.17 billion in operating cash flow during the quarter and repurchased about 8.5 million shares -- roughly 2% of its shares outstanding, in three months. Of course, there are reasons the stock is this cheap, and the biggest is the AI threat itself. Generative AI can now produce images, video, and design work on its own, and if that is where creation is headed, fewer people may need Adobe's professional tools. For now, however, the fear shows up in Adobe's stock price far more than in its reported numbers. The soft spots are modest. Total annualized recurring revenue is on pace to grow about 10% this fiscal year, slower than revenue -- and that pace leans on the roughly $480 million of recurring revenue that arrived with the Semrush deal, so the organic base is likely slowing more than the headline number shows. The company took a roughly $70 million goodwill impairment on its publishing and advertising unit in fiscal Q2. And Adobe's chief financial officer departed in June, with Steve Day, a 20-year company veteran, stepping in on an interim basis. The bigger open seat is the top one. CEO Shantanu Narayen said in March, after 18 years in the job, that he'll step aside once the board names a successor. Each of those is worth watching, and none of them shows up in the growth numbers yet. The AI-first recurring revenue figure cuts the other way entirely. A product group tripling to more than $500 million in annualized recurring revenue inside Adobe is, so far, evidence of AI adding to the company's sales. The threat may still arrive. It hasn't yet. At roughly 10 times next year's expected earnings, the market is pricing Adobe as if its growth is about to stop. But things don't look that way. A company growing revenue at a double-digit rate, raising its guidance, and buying back 2% of its shares in a single quarter doesn't usually trade at these multiples unless the market believes something is about to break. Maybe something will. AI is arguably the most serious competitive threat Adobe has faced in a long time, and a technology shift this large could eventually pull customers away faster than it adds revenue. But that would be a future problem showing up in future numbers. In the reported ones, revenue set a record last quarter, the revenue and adjusted earnings targets went up in June, and the products the market fears most are the ones growing fastest. The stock is priced for a decline that, for now, exists only in the forecast.Ultimately, I think shares look attractive here. Before you buy stock in Adobe, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Adobe wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $421,511!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,381,960!* Now, it’s worth noting Stock Advisor’s total average return is 981% — a market-crushing outperformance compared to 216% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 16, 2026. Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy. Adobe Trades at 10 Times Next Year's Earnings. Is It Finally Time to Buy the Stock? was originally published by The Motley Fool

You pay less than the market for Adobe on earnings and cash flow, and what comes with the discount is a growth engine management is deliberately rebuilding. Adobe (ADBE) is down about 29% over the trailing twelve months and up 28% over the past month. It has traded between $193.41 and $370.70 across the trailing 52 weeks and now sits at roughly $250. The tape is arguing with itself, so the real question is what you pay and what must happen next. Cheaper Than The Market On Profits, Dearer On Sales On earnings you pay less than the index: 14.6 times earnings against 24.4 for the S&P 500. On cash flow the discount is a little smaller, 10.1 times operating cash flow versus 15.8. The sales multiple inverts it, 4.2 times against 3.4 for the index. That is arithmetic: a 29% net margin against 12.9% for the S&P 500 makes a low earnings multiple look dear on sales. Two of the three saying cheap and the third saying dear is why the setup reads mixed, not cheap. Eleven Percent Growth On A Thirty-Six Percent Margin Revenue over the trailing twelve months was $25.2 billion, up from $22.6 billion a year earlier, compounding at an 11.0% average annual rate over the last three years against 5.9% for the S&P 500. In fiscal Q2 2026, the quarter ended in May, revenue grew 12.7% year over year to $6.6 billion. Profitability is where the distance shows: an operating margin of 36% against 18.4% for the S&P 500, and 42% of revenue arriving as operating cash flow against 22% for the market. By those measures this is a better business than the index. What it is doing with that business is the rest of the decision. What Is Being Traded Away To Win Free Users By its own account the company is re-balancing incoming traffic toward free journeys rather than sending it predominantly to a paid checkout, and has deferred a planned round of Creative Cloud price increases. Management says that lowers what individual subscribers add to annual recurring revenue across the second half of fiscal 2026, and its ARR growth target of 10.2% for fiscal 2026 already absorbs both that choice and the Semrush deal closed in April. What it is buying is reach, and the early results are the argument: free creative monthly active users went from 50 million to 90 million over the past year, and Acrobat and Express monthly active users from more than 700 million to more than 850 million. The bet is that free users become paying users later. Later, By Management's Own Answer, Means 2027 One analyst's math puts the near-term cost at roughly half a billion dollars of annual recurring revenue, and management's own answer on when that comes back is 2027, with the free Acrobat Reader business as the precedent for how a large free base eventually pays. The company is also doing this mid-handover: the chief executive is moving to board chair with a successor search underway, and the finance chief is leaving, with an interim replacement named. None of that makes the strategy wrong. It does mean you would be buying a transition, not a steady state. If Markets Break Before The Payback Arrives History is not comforting here. In the 2022 inflation shock the stock fell 51% while the S&P 500 fell 24%, and it took about 20 months to get back to its old high. The 2020 pandemic crash was the exception, a 26% fall against 34% for the market. The options market is pricing the same unease: implied volatility of 49 sits in the 98th percentile of its trailing one-year range. Three Things Decide Whether The Discount Closes Conversion first: the free base has to show up in paid revenue, against the 10.2% ARR growth target management set for itself. Then margin: the 36% operating margin has to survive spending on cloud, models and marketing, and margin is usually the first thing a land grab costs. Then the discount itself, which only pays you if it narrows. If you would rather see those scored together than argued one at a time, that is what a five-factor scorecard is for. Get the first two and the third tends to follow; miss them and nothing forces the discount to close. A Discount You Have To Wait Out Is Still A Single Bet Whatever you decide, the waiting is the part you cannot control. A position can be right about the business and still cost you years of patience, which is why we run the Trefis High Quality portfolio, a rules-based basket where no single holding decides your outcome. The Trefis High Quality (HQ) Portfolio has a track record of outpacing a benchmark that combines the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000.