![]() ![]() Investors made ADBE expensive because it has higher gross and net income margins than Google. Raising subscription fees is the main tailwind behind Adobe’s consistently high 38.79% net income margin. Seeking Alpha’s algorithm gives weigh more to Adobe’s excellent Profitability and Momentum grades than its C- score in Growth. 1 in global enterprise SaaS since Q1 2019.Īdobe’s ability to raise its prices without alienating its customers is likely why Seeking Alpha’s Quant Rating System algorithm remains very bullish on ADBE. Investors making ADBE more expensive than MSFT is very amusing. ADBE touts a TTM P/E (54.24) and TTM P/S (20.84) ratios than GOOGL and MSFT. Adobe has higher valuation ratios than its SaaS peers, Google ( GOOGL) and Microsoft ( MSFT). (Source: Seeking Alpha Premium) High-Quality, Profitable Investments Are Pricey The 22 million Creative Cloud customers can obviously afford price increases in Creative Cloud. ![]() Bulls raise ADBE’s price because Adobe can increase Creative Cloud prices anytime it wants. Creative Cloud is still the biggest growth driver for Adobe. Based on the rapid growth of its annual sales/net income, Adobe does not lose customers by raising its Creative Cloud prices.Īs per Adobe’s most recent ER, Creative Cloud’s annual recurring revenue increased +24% Y/Y to $2.32 billion. Adobe increased Creative Cloud’s teams package from averaging $52.99/month in 2018 to $79.99/month today. Content creators and creative professionals are dependent on Creative Cloud software programs. You should remain long ADBE because of Creative Cloud’s invidious near-monopoly in content creation software. The consistent motif of my past 15 recommendations for Adobe ( NASDAQ: ADBE) is Creative Cloud. Hapabapa/iStock Editorial via Getty Images
0 Comments
Leave a Reply. |