Adobe Systems Incorporated (ADBE:NSD) Analysts rate with a Strong Buy, $599 target

STA Research
by: STA Research

Based on the Adobe Systems Incorporated stock forecasts from 20 analysts, the average analyst target price for Adobe Systems Incorporated is USD 598.79 over the next 12 months. Adobe Systems Incorporated’s average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of Adobe Systems Incorporated is Bullish , which is based on 10 positive signals and 3 negative signals. At the last closing, Adobe Systems Incorporated’s stock price was USD 433.42. Adobe Systems Incorporated’s stock price has changed by +16.94% over the past week, +42.41% over the past month and -14.88% over the last year.

UBS Securities just recently maintained the Neutral rating on the stock, and cut the target to $450 from $460.

Adobe Inc. is a global, diversified software company that operates all over the world. It is organised into three divisions, which are the Digital Media division, the Digital Experience division, and the Publishing and Advertising division. In October of 2018, the company officially changed its name from Adobe Systems Incorporated to Adobe Inc., which had previously been its previous name.

 

What we like:

High market capitalization

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

Superior risk adjusted returns

This stock has performed well, on a risk adjusted basis, compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile.

Low volatility

The stock’s annual returns have been stable and consistent compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile. Although stability is good, also keep in mind it can limit returns.

Superior return on equity

The company management has delivered better return on equity in the most recent 4 quarters than its peers, placing it in the top quartile.

Superior capital utilization

The company management has delivered better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.

Superior return on assets

The company management has delivered better return on assets in the most recent 4 quarters than its peers, placing it in the top quartile.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

Superior Earnings Growth

This stock has shown top quartile earnings growth in the previous 5 years compared to its sector.

High Gross Profit to Asset Ratio

This stock is in the top quartile compared to its peers on Gross Profit to Asset Ratio. This is a popular measure among value investors for showing superior returns in the long run.

 

What we don’t like:

Overpriced compared to book value

The stock is trading high compared to its peer’s median on a price to book value basis.

Overpriced on cashflow basis

The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering buying.

Overpriced on free cash flow basis

The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering buying.

 

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