“Adobe’s business delivered another quarter of good results in F3Q that should lend support to valuation. F3Q results display strong profitable growth and healthy free cash flow generation, which we think is impressive given the business’s size. On balance, the margin improvement trend is slowing, as expected, partially from the expenses required for Magento. A slower margin improvement trend could be a headwind for further multiples expansion, though the management commentary on the commerce opportunity and pipeline momentum was strong, suggesting Magento revenue synergies are likely outperforming the plan. Bottom Line: We are positive on Adobe’s fundamentals, execution, and management, but remain sidelined on valuation. We also believe the digital transformation bull case for ADBE is well understand on the Street, and the name is a consensus long.”
According to TipRanks.com, Schwartz is a top 25 analyst with an average return of 30.5% and a 80.4% success rate. Schwartz covers the Technology sector, focusing on stocks such as Ultimate Software, Instructure Inc, and Salesforce.com.
Adobe has an analyst consensus of Moderate Buy, with a price target consensus of $276.50, representing a 3.0% upside. In a report issued on September 11, Goldman Sachs also reiterated a Hold rating on the stock with a $260 price target.
The company has a one-year high of $270.94 and a one-year low of $143.95. Currently, Adobe has an average volume of 2.8M.
Based on the recent corporate insider activity of 49 insiders, corporate insider sentiment is negative on the stock.
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