Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Adobe Inc. (NASDAQ: ADBE) is a global technology company. The Company's products, services and solutions are used around the world to imagine, create, manage, deliver, measure, optimize and engage with content across surfaces and fuel digital experiences. Its segments include digital media, digital experience, and publishing and advertising.

Kalkine’s American Tech Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

  Stock Performance:

• ADBE has corrected by 10.36% in the past three months, on the other hand with a 70.18% return in the past one year.

• The stock is leaning towards its higher band of its 52-week range of USD 638.25 and 52-week low price of USD 323.29. Post the announcement of FY23 results the stock has corrected by around 9.88%, with currently price is currently near an important support zone of USD 520-USD 550.
• The price is currently trading between its long-term (200-day) SMA and its short-term (50-day) SMA, with the current RSI of around 45.75.

 

1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

Adobe Inc. (ADBE) has shown consistent positive growth in revenue from 2019 to 2023, with figures rising from USD 11.17 billion to USD 19.41 billion. The gross profit also witnessed a steady increase over the same period, progressing from USD 9.5 billion to USD 17.06 billion. In terms of net margin, Adobe has exhibited resilience in net margins, outperforming the industry median of -6.4% to a robust 28.0% in 2023,. This positive trend underscores Adobe's financial strength and efficiency, positioning the company favorably within its industry.

1.4 Top 10 shareholders:

The top 10 shareholders together form ~30.27% of the total shareholding, signifying concentrated shareholding. The Vanguard Group, Inc. and BlackRock Institutional Trust Company, N.A. are the biggest shareholders, holding the maximum stake in the company at ~8.85% and ~5.37%, respectively.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

 2.2 Insights of FY23:

Section 3: Key Risks and Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

  Stock Performance:

• ADBE has corrected by 10.36% in the past three months, on the other hand with a 70.18% return in the past one year.

• The stock is leaning towards its higher band of its 52-week range of USD 638.25 and 52-week low price of USD 323.29. Post the announcement of FY23 results the stock has corrected by around 9.88%, with currently price is currently near an important support zone of USD 520-USD 550.
• The price is currently trading between its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of around 45.75.

 

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings per share Multiple Based Relative Valuation

 

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 11, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.