Adobe (ADBE, Financial) shares have declined by $8.43, trading around $373.81, reflecting a mixed sentiment in the options market. The trading activity has been relatively subdued, with about 16,000 contracts changing hands. Calls are outpacing puts, resulting in a put/call ratio of 0.52, which contrasts with the more typical level of approximately 1.09.
The implied volatility (IV30) has slightly increased by 0.7 points, reaching about 26.5, although it remains below the median value for the past year. This suggests that the expected daily price movement stands at $6.24. The put-call skew has seen some flattening, indicating a slightly optimistic outlook. This comes in the wake of a downgrade to Sell by Rothschild & Co Redburn, adding another layer of complexity to the current market sentiment surrounding Adobe.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 33 analysts, the average target price for Adobe Inc (ADBE, Financial) is $495.11 with a high estimate of $660.00 and a low estimate of $280.00. The average target implies an upside of 32.85% from the current price of $372.69. More detailed estimate data can be found on the Adobe Inc (ADBE) Forecast page.
Based on the consensus recommendation from 41 brokerage firms, Adobe Inc's (ADBE, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Adobe Inc (ADBE, Financial) in one year is $636.39, suggesting a upside of 70.76% from the current price of $372.685. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Adobe Inc (ADBE) Summary page.
ADBE Key Business Developments
Release Date: June 12, 2025
- Revenue: $5.87 billion, 11% year over year growth.
- GAAP Earnings Per Share (EPS): $3.94, 13% year over year growth.
- Non-GAAP EPS: $5.06, 13% year over year growth.
- Digital Media Revenue: $4.35 billion, 12% year over year growth.
- Digital Media ARR: $18.09 billion, 12.1% year over year growth.
- Digital Experience Revenue: $1.46 billion, 10% year over year growth.
- Cash Flows from Operations: $2.19 billion, a record for Q2.
- Remaining Performance Obligations (RPO): $19.69 billion, 10% year over year growth.
- Share Repurchase Agreement: $3.50 billion, with $10.90 billion remaining authorization.
- Q3 FY25 Revenue Target: $5.875 billion to $5.925 billion.
- FY25 Revenue Target: $23.50 billion to $23.60 billion.
- FY25 GAAP EPS Target: $16.30 to $16.50.
- FY25 Non-GAAP EPS Target: $20.50 to $20.70.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Adobe Inc (ADBE, Financial) achieved record revenue of $5.87 billion, representing 11% year-over-year growth.
- The company reported a strong GAAP earnings per share of $3.94 and non-GAAP earnings per share of $5.06, showing a 13% year-over-year growth.
- Adobe's Digital Media segment achieved revenue of $4.35 billion, with a 12% year-over-year growth in ARR.
- The Firefly app is attracting new users, with first-time subscribers growing 30% quarter over quarter.
- Adobe's AI initiatives, such as Acrobat AI Assistant and Firefly, are contributing significantly to revenue, with AI-influenced ARR tracking ahead of the $250 million target for fiscal 2025.
Negative Points
- Despite strong growth, the competitive environment remains challenging, particularly with disruptors in the market.
- The rollout of new pricing strategies, such as Creative Cloud Pro, is still in early stages and may take time to impact revenue significantly.
- There is a need for increased marketing investment to raise awareness of new products like Adobe Express.
- The integration of AI features into existing products is ongoing, and the full monetization potential is yet to be realized.
- The macroeconomic environment remains dynamic, which could impact future financial performance and targets.
