Should you buy Adobe stock? (June 2024)

Published first at https://www.3minutebreakdowns.com Adobe stock analysis. Ticker: $ADBE Adobe reported earnings last week and the stock jumped by 15% taking the company’s market value to 235 billion dollars. With 8 billion of cash and investments on its balance sheet and 4 billion of debt, the enterprise value is 231 billion. Revenue over the last 12 months is 20.4 billion with just over 5 billion of net income and 6.4 billion of free cash flow. So Adobe stock is now valued at 11 times revenue and 46 times earnings. That seems like an expensive valuation but that’s because Adobe is one of the best businesses in the world. Revenue has grown every year for the last 10 years at a compounded annual growth rate of 17%. Earnings per share has grown continuously supported by recurring revenue growth and share buybacks.. And the latest quarter provides more evidence of Adobe’s quality. Revenue grew 10% year over year which was above analyst estimates and the company raised its targets for the rest of the year. Crucially, management said on the earnings call that they are seeing strong uptake for the company’s new generative AI products such as FIrefly and this is bringing new users into the Adobe ecosystem. This is important because the bear case for Adobe revolves around new AI products taking market share. #investing #stocks #adobestock #3mb