Adobe Inc. is close to a major resistance level, whereby the breach of this level could be considered as a buy signal. This reflects our preferred scenario in light of the stock's current technical chart pattern.
Summary
● The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.
Strengths
● Growth is a substantial asset for the company, as anticipated by dedicated analysts. Within the next three years, growth is estimated to reach 58% by 2023.
● Margins returned by the company are among the highest on the stock exchange list. Its core activity clears big profits.
● Thanks to a sound financial situation, the firm has significant leeway for investment.
● Considering the small differences between the analysts' various estimates, the group's business visibility is good.
● Historically, the company has been releasing figures that are above expectations.
● Sales forecast by analysts have been recently revised upwards.
● Analysts covering this company mostly recommend stock overweighting or purchase.
● The stock is in a well-established, long-term rising trend above the technical support level at 472.44 USD
Weaknesses
● Stock prices approach a strong long-term resistance in weekly data at USD 525.08.
● The stock is close to a major daily resistance at USD 525.08, which should be gotten rid of so as to gain new appreciation potential.
● The company's "enterprise value to sales" ratio is among the highest in the world.
● The company's valuation in terms of earnings multiples is rather high. Indeed, the firm is getting paid 56.19 times its estimated earnings per share for the ongoing year.
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Adobe Inc. specializes in the development of software for content design, publication and visual distribution. Net sales break down by product family as follows:
- digital media software (73.3%): primarily creation, illustration, viewing, conversion and digital contents broadcasting;
- online marketing and business process management software (25.2%): web publishing, information security, business resources planning, document production management, application automation software, etc.;
- other (1.5%): software for high-definition printing, online training, etc.
Net sales break down by source of income between sales of subscriptions (94.2%), sales of services 3.4%; consulting, training, maintenance and technical support services) and sales of products (2.4%).
Net sales are distributed geographically as follows: the United States (53.9%), Americas (6.2%), Europe/Middle East/Africa (25.1%) and Asia/Pacific (14.8%).