Should you buy Adobe stock? (December 2024)

Published first at https://www.3minutebreakdowns.com Adobe stock analysis. Ticker symbol: $ADBE Adobe reported earnings last week and the stock dived 14% taking the company’s market value to 205 billion dollars. With 7.9 billion of cash on the balance sheet and 4 billion of debt, Adobe’s enterprise value is 200.7 billion. Revenue over the last 12 months comes to 20.3 billion with 5 billion of net income and 8.1 billion of free cash flow. So Adobe stock is now valued at 10 times revenue. 39 times earnings and 25 times free cash flow. Adobe stock is down 23% this year and there are a few reasons why. The first is valuation. The company came into the year trading at 50 times earnings which is high even for a company like Adobe. There’s been some negative news too. Adobe has come under pressure from the Federal Trade Commission for deceiving customers and making it hard to cancel subscriptions. Changes there could hurt the company’s revenue growth going forward. Another reason is competition. 2024 has seen an explosion in new AI tools that unbundle many of Adobe’s best products. Photoshop clone Canva now has 170 million monthly users and a private valuation of 50 billion dollars. There’s also MidJourney, Sora and many others. And Adobe’s plan to acquire one competitor, design platform Figma, fell through. #investing #stocks #stockstobuy #adobe