ADBE
Adobe Systems Incorporated
TMT
12/11/2014
Presented
| Date | 12/09/2014 |
| Price | $71.57 |
| Market Cap | $35.70B |
| Ent Value | $36.30B |
| P/E Ratio | 127.8x |
| Book Value | $13.50 |
| Div Yield | 0% |
| Shares O/S | 498.74M |
| Ave Daily Vol | 3,240,000 |
| Short Int | 1.14% |
Current
| Price | $508.03 |
| Market Cap | $223.63B |
| Adobe Systems Incorporated operates as a diversified software company worldwide. It operates in three segments: Digital Media, Digital Marketing, and Print and Publishing. The Digital Media segment provides tools and solutions that enable individuals, small businesses, and enterprises to create, publish, promote, and monetize their digital content anywhere. This segment’s flagship product is Adobe Creative Cloud, a subscription service that allows customers to download and install the latest version 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 Digital Marketing segment provides solutions and services for how digital advertising and marketing are created, managed, executed, measured, and optimized. This segment also offers analytics, social, targeting, media optimization, Web experience management, and cross-channel campaign management solutions to digital marketers, advertisers, publishers, merchandisers, Web analysts, chief marketing officers, chief information officers, and chief revenue officers. The Print and Publishing segment provides products and services that address diverse market opportunities, including eLearning 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 distributes its products through a network of distributors, value-added resellers, systems integrators, independent software vendors, retailers, and OEMs. It also markets and licenses its products and services directly to enterprise customers through its sales force, to end-users through app stores, and through its Website at adobe.com. Adobe Systems Incorporated was founded in 1982 and is headquartered in San Jose, California. |
Publicly traded companies mentioned herein: Adobe Systems Inc (ADBE)
Highlights
The presenter believes Adobe Systems (ADBE) is starting to become a more controversial investment as the business model transition from license to subscription nears an end. There are worries about growth in ADBE’s subscriber base, as well as disagreement over the right level of margins the company should earn. He is long the stock at present levels (~$71) and believes the “lifetime value of subscription customers is substantially greater than license customers; there is no sales cycle every three years, upgrades are fluid, and margins could approach the high 30%s.” If his expectations and model assumptions ultimately prove to be accurate, ADBE’s subscriber base, margins, and EPS growth will exceed Street expectations over the next two years, and shares should perform well.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.
◆Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.