ADBE
Adobe Systems Inc
TMT
07/15/2016
Presented
| Date | 07/12/2016 |
| Price | $97.54 |
| Market Cap | $49.23B |
| Ent Value | $47.42B |
| P/E Ratio | 55.42x |
| Book Value | $14.53 |
| Div Yield | 0% |
| Shares O/S | 504.73M |
| Ave Daily Vol | 2,515,703 |
| Short Int | 0.98% |
Current
| Price | $508.03 |
| Market Cap | $223.63B |
| Adobe Systems, Inc. provides digital marketing and digital media solutions. The company operates its business through three segments: Digital Media, Digital Marketing, and Print and Publishing. The Digital Media segment offers creative cloud services, which allow members to download and install the latest versions of products, such as Adobe Photoshop, Adobe Illustrator, Adobe Premiere Pro, Adobe Photoshop Lightroom and Adobe InDesign, as well as utilize other tools, such as Adobe Acrobat. This segment also offers other tools and services, including hobbyist products, such as Adobe Photoshop Elements and Adobe Premiere Elements, Adobe Digital Publishing Suite, Adobe PhoneGap, Adobe Typekit, as well as mobile apps, such as Adobe Photoshop Mix, Adobe Photoshop Sketch and Adobe Premiere Clip that run on tablets and mobile devices. The Digital Media serves professionals, including graphic designers, production artists, web designers and developers, user interface designers, videographers, motion graphic artists, prepress professionals, video game developers, mobile application developers, students and administrators. The Digital Marketing segment offers various solutions, including analytics, social marketing, targeting, media optimization, digital experience management and cross-channel campaign management, as well as premium video delivery and monetization. This segment also offers legacy enterprise software, such as Adobe Connect web conferencing platform and Adobe LiveCycle. The Print and Publishing segment offers legacy products and services for eLearning solutions, technical document publishing, web application development and high-end printing. Adobe Systems was founded by Charles M. Geschke and John E. Warnock in December 1982 and is headquartered in San Jose, CA. |
Publicly traded companies mentioned herein: Adobe Inc (ADBE), Alphabet Inc (GOOGL), Autodesk Inc (ADSK), CDK Global Inc (CDK), Facebook Inc (FB), PTC Inc (PTC), Salesforce.com Inc (CRM)
Highlights
“Everyone says the story is over for Adobe (ADBE)”; however, the presenter sees more upside for patient shareholders and is long the stock at $97. The math everyone sees is actually more bullish than most investors realize, in his opinion. Going back three years, ADBE’s 12.8mm subscribers were growing 30% annually, organically, and extrapolating that forward suggests closer to 20mm subscribers today. This means “ADBE is not in the 8th inning of the game, it’s in the 4th”, and given high renewal rates the runway he sees for revenue and earnings growth there is the potential for EPS to reach $5.50 (versus the Street at ~4.80) in 2018. The stock presently trades at 25x next year’s consensus estimate ($3.80/ share) and 20x 2018 forecasts, so shares should continue to trade higher over the next 12-24 months on good growth alone. Additionally, there is optionality around M&A and capital deployment.
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