Is it time to consider buying Adobe Inc. (NASDAQ: ADBE)?
Let’s talk about the popular Adobe Inc. (NASDAQ: ADBE). Shares of the company have led NASDAQGS winners with a relatively large price rally over the past two weeks. As a large-cap stock with high analyst coverage, you can assume that any recent changes in the company’s outlook are already priced into the stock. However, could the stock still trade at a relatively cheap price? Today, I’ll analyze the most recent data on Adobe’s outlook and valuation to see if the opportunity still exists.
What is Adobe worth?
Good news for investors – Adobe is still trading at a fairly cheap price. According to my assessment, the intrinsic value of the stock is $622.39, but it is currently trading at US$446 in the stock market, which means there is still a buying opportunity now. However, there may be another chance to buy again in the future. This is because Adobe’s beta (a measure of stock price volatility) is high, which means that its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s stock will likely fall more than the rest of the market, providing an excellent buying opportunity.
What does the future of Adobe look like?
Investors looking for portfolio growth may want to consider a company’s prospects before buying its stock. Although value investors argue that it is intrinsic value relative to price that matters most, a more compelling investment thesis would be high growth potential at a cheap price. With profits expected to increase by 53% over the next two years, the future looks bright for Adobe. It seems that a higher cash flow is expected for the stock, which should translate into a higher valuation of the stock.
What this means for you
Are you a shareholder? Given that ADBE is currently undervalued, now may be the time to increase your stock holdings. With a positive outlook on the horizon, it appears that this growth has yet to be fully priced into the stock price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping your eye on ADBE for a while, it might be time to take the plunge. Its prosperous future prospects are not yet fully reflected in the current share price, which means it is not too late to buy ADBE. But before making investment decisions, consider other factors such as the track record of its management team, in order to make an informed investment decision.
Diving deeper into the previously mentioned Adobe forecasts will help you understand how analysts view the stock going forward. Luckily, you can check analyst forecasts by clicking here.
If you are no longer interested in Adobe, you can use our free platform to view our list of over 50 other stocks with high growth potential.
Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.