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With a market cap of $217.8 billion, San Jose, California-based Adobe Inc. (ADBE) is a global leader in software solutions. Known for its creative and digital experience products, Adobe provides tools for content creation, document management, and customer experience optimization to professionals and enterprises worldwide.
Shares of Adobe have significantly underperformed the broader market over the past 52 weeks. ADBE has dipped 15.5% over this time frame, while the broader S&P 500 Index ($SPX) has gained 36.8%. In 2024, shares of ADBE are down 17.1%, compared to SPX’s 25.7% increase on a YTD basis.
Narrowing the focus, ADBE has also lagged behind the Technology Select Sector SPDR Fund's (XLK) 34.9% returns over the past 52 weeks and a 23.2% YTD gain.
Adobe's stock dropped 8.5% after the company reported fiscal Q3 results on Sep. 12, which beat expectations but issued weaker-than-expected guidance for Q4. While Q3 revenue of $5.4 billion and earnings of $4.65 per share surpassed analyst forecasts, Adobe’s Q4 revenue guidance of $5.5 to $5.6 billion and earnings of $4.36 to $4.68 per share fell short of Wall Street’s targets. Additionally, its digital media segment’s projected annual recurring revenue of $550 million was disappointing, missing analysts’ expectations of $561.1 million, which raised concerns about traction in its newer AI-powered products. This weaker guidance and investor uncertainty about Adobe’s position in the competitive generative AI market drove the stock sell-off.
For the current fiscal year, ending in November 2025, analysts expect ADBE’s EPS to grow 15.8% year-over-year to $14.82. The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on another occasion.
Among the 31 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 22 “Strong Buy” ratings, one “Moderate Buy,” six “Holds,” and two “Strong Sells.”
On Sep. 13, Wolfe Research reaffirmed its "Outperform" rating and price target of $685 on Adobe, emphasizing Adobe’s strength in digital media, boosted by new AI-driven products like GenStudio and Firefly. The firm anticipates successfully monetizing Firefly, which could enhance investor confidence and drive growth in the expanding generative AI market.
The mean price target of $609.27 represents a premium of 23.2% to ADBE’s current levels. The Street-high price target of $703, implies a potential upside of 42.1% from the current price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
