From Nasdaq: 2025-04-23 13:32:00

Adobe shares are trading at a premium with a Value Score of D and a forward 12-month price/sales ratio of 6.14X, higher than the Computer and Technology sector’s 5.06X. Competitors like Salesforce and DocuSign have lower P/S ratios at 5.62X and 4.73X, respectively. ADBE stock has declined 21.3% YTD due to tariff headwinds and competition from Microsoft and others.

Adobe’s AI business faces stiff competition, but the company has expanded its AI portfolio with new offerings. Monetization efforts include standalone subscriptions for Firefly and sales capacity investments. Adobe expects its AI book of business to double by the end of fiscal 2025, driving top-line growth. Positive guidance for fiscal 2025 includes growth in Digital Media and Experience segments.

Estimates for ADBE’s fiscal 2025 earnings have decreased slightly, but growth is still expected over fiscal 2024. Second-quarter fiscal 2025 earnings are forecasted to grow by 10.71% from the year-ago quarter. While Adobe’s GenAI focus is a key catalyst, stretched valuation and bearish trends in stock performance may make it a hold for some investors.

ADBE stock currently trades below the 50-day and 200-day moving averages, indicating a bearish trend. With a Zacks Rank of #3 (Hold), investors may want to wait for a better entry point. The stock is part of the 7 Best Stocks for the Next 30 Days list, offering potential for early price pops. For more information and analysis on Adobe and other stocks, visit Zacks Investment Research.



Read more at Nasdaq: Is Adobe Stock’s 6.14X P/S Still Worth it? Buy, Sell or Hold?