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Adobe Inc ADBE

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Morningstar’s Analysis

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Strength Abounds As Adobe Reports Impressive Results; FVE Up to $520

Dan Romanoff, CPA Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

Wide-moat Adobe reported strong first quarter results, including upside to guidance for both revenue and non-GAAP EPS, and provided quarterly guidance that was ahead of Street expectations. Importantly, management also raised its full year outlook. The company announced CFO John Murphy will be retiring this year for personal reasons and a search is underway for a successor. We see strength on all fronts of quarterly performance. New customer engagement levels remained strong and activity on remains elevated as a result of the extended remote work environment. We think results continue to support our investment case that Adobe will continue to dominate the creative segment, and its well-rounded portfolio, including Magento and Marketo, position the firm as a digital marketing leader. Given results and guidance, we are raising our fair value estimate to $520 per share, from $500. As software has lagged early in 2021, we see shares as increasingly attractive.

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Company Profile

Business Description

Adobe provides content creation, document management, and digital marketing and advertising software and services to creative professionals and marketers for creating, managing, delivering, measuring, optimizing and engaging with compelling content multiple operating systems, devices and media. The company operates with three segments: digital media content creation, digital experience for marketing solutions, and publishing for legacy products (less than 5% of revenue).

345 Park Avenue
San Jose, CA, 95110-2704
T +1 408 536-6000
Sector Technology
Industry Software - Infrastructure
Most Recent Earnings Feb 28, 2021
Fiscal Year End Nov 27, 2021
Stock Type Aggressive Growth
Employees 22,516