Stock Choice: ADBE

Nov 25, 20221 min read

By Zack Pelosky

As tech ends its consolidation phase and begins its recovery, Adobe is a company that is certain to receive significant bullish attention from investors. After suffering a sharp (49.53% YTD) drop in share price, Adobe became the center of the tech comeback with its acquisition of Figma, the $20 billion interface design company. The deal serves as the perfect catalyst for short-term gain with Adobe as it draws attention from investors, despite Adobe not being a highly-valued company. Furthermore, this acquisition enabled Adobe to be one of the leading digital experience and software companies, as it prevents larger companies such as Microsoft from gaining access to Figma’s innovations. This isolation gives Adobe limitless potential.

Furthermore, Adobe is once again becoming more and more relevant in the shift to a digital economy as it garners many convenient features, such as its Creative Cloud subscription, which bundles popular tools such as Illustrator, Photoshop, InDesign, Premiere, and Acrobat.

Adobe’s efficacy boasts a 25.63% profit margin, a $1.14 Billion Net Income, and 88% gross margins, making Adobe a strong and consistent player.

Though the announcement deal with Figma resulted in a selloff, Adobe plans to finalize the fine print and announce how the deal will greatly impact Adobe’s capabilities, which will likely return the positive sentiment.