Adobe - Software giant (BUY - 420)

Adobe Inc. operates as a diversified software company worldwide. Its Digital Media segment provides tools and solutions that enable individuals, small and medium businesses, and enterprises to create, publish, promote, and monetize their digital content. Its flagship product is Creative Cloud, a subscription service that allows customer to download and access the latest versions of its creative products.

This segment serves traditional content creators, Web application developers, and digital media professionals, as well as their management in marketing departments and agencies, companies, and publishers. The company’s Digital Experience segment offers solutions for how digital advertising and marketing are created, managed, executed, measured, and optimized.

This segment provides analytics, social marketing, targeting, media optimization, digital experience management, cross-channel campaign management, marketing automation, audience management, and video delivery and monetization solutions to digital marketers, advertisers, publishers, merchandisers, Web analysts, chief marketing officers, chief information officers, and chief revenue officers.

Its Publishing segment offers products and services, such as e-learning solutions, technical document publishing, Web application development, and high-end printing, as well as publishing needs of technical and business, and original equipment manufacturers (OEMs) printing businesses.

The company offers its products and services directly to enterprise customers through its sales force, as well as to end-users through app stores and through its Website at It also distributes products and services through a network of distributors, value-added resellers, systems integrators, software vendors and developers, retailers, and OEMs.

The company was formerly known as Adobe Systems Incorporated and changed its name to Adobe Inc. in October 2018. The company was founded in 1982 and is headquartered in San Jose, California.

Adobe share price, revenue, EBITDA, FCF CAGR, correlation, beta
Adobe's share has been performing rather well during the last years, which is seen by consistently rising revenues and EBTDA, as well as continually growing Free Cash Flows.

SP500's technology sector (XLK), has been the best continuing performer, where Adobe is a constituent.

In order to understand the XLK's meteoric rise and the success of Adobe as well, it is important to provide historical and societal context, as the world is going through profound changes in the Age of Digitization. 

A few data points ought to illustrate the changes we have seen the last 20 years.


  • Cell phone subscribers: 1.5 billion (19% of world population in 2002)
  • Internet users: 631 million (11% of world population in 2002)


  • Cell phone subscribers: 4 billion (68% of world population in 2010)
  • Internet users: 1.8 billion (26.6% of world population in 2010)


  • Cell phone subscribers: 4.78 billion (62% of world population in 2020)
  • Internet users: 4.54 billion (59% of world population in 2020)

- Sources

As the globe is gradually increasing its internet penetration, so is the volume of traffic of digital content, as well as multimedia. Adobe, with its platforms is at the forefront in terms of benefitting of these changes. 

We believe that as we enter the 20s, technology-stocks will be key benefecators of these changes around the globe, which includes Adobe.

We would therefore give Adobe a strong BUY, with a target price of 420$ until Q3 of 2020.