Adobe Stock News

I reiterate a “Strong Buy” rating for Adobe Inc. stock with a fair value of $600 per share, driven by their robust AI capabilities and future growth potential. Adobe's Firefly Video Model, set to release later this year, will enable AI-powered video generation, enhancing their competitive edge in digital media. Despite weak Q4 guidance for net new digital media ARR, Adobe's AI investments in to...

Adobe beat analyst expectations for its Q3 results but a lower guidance has raised the question of the company's ability to turn AI investments into increased revenue.

Adobe shares fell Friday, a day after the company released third-quarter results that offered weak guidance. The company said it expects to report revenue between $5.5 billion and $5.55 billion in its fourth quarter, short of the $5.61 billion expected by analysts polled by LSEG.

Adobe Inc (NASDAQ:ADBE) shares are set to open 9% lower on Friday as weak revenue guidance overshadowed a record fiscal third quarter. The creative software provider expected Q4 revenue in the range of $5.5 billion to $5.55 billion, short of analyst forecast of $5.6 billion.

Shares of Adobe fell over 8% in premarket trading on Friday, after the Photoshop maker's disappointing quarterly earnings forecast sparked fears that returns from its push towards artificial intelligence design will take longer to materialize.

Adobe stock fell 9.1% after its Q3-2024 results, mainly due to slightly lower-than-expected guidance, but the drop seems overdone. Despite the guidance miss, ADBE beat revenue and EPS expectations, showing strong operational performance and cash flow growth. The valuation is now reasonable, implying attainable FCF per share growth over the next decade, making Adobe a long-term buy.

Adobe's outlook led to a 9% sell-off, with bulls seeing value and bears questioning growth, making it a battleground stock. Adobe's AI enhancements improve productivity, but rising competition in AI-driven tools threatens its dominance and growth prospects. Despite guiding for 11% y/y revenue growth, Adobe's growth is slowing, and its valuation at 25x next year's EPS isn't enticing.

Adobe (ADBE) shares tumbled in extended trading on Thursday after the digital multimedia software maker issued a disappointing current-quarter outlook that overshadowed better-than-expected results for its fiscal third quarter.