Adobe Closes the Year With Solid Results; Maintains 2023 Guidance; FVE Stable at $425

Wide-moat Adobe reported solid fourth-quarter results, including revenue and non-GAAP operating profits that were basically in line with our model. The firm also reiterated its complete outlook for full-year 2023. Overall, we consider this a win for Adobe and investors, although with the exception of easing currency pressure, we are not ready to assume the rest of our software coverage will follow a similar favorable pattern next month. Management also noted the Figma acquisition is under review by various regulatory bodies around the world and is progressing as expected. We continue to believe the deal closes in fiscal 2023. Given no changes to guidance and a relatively stable environment, we are maintaining our fair value estimate of $425 and view shares as attractive for long-term investors, although we do see heightened sensitivity to a possible slowdown within the advertising arena in the event of a possible recession in 2023.