AI Is Driving Innovation and Growth at Adobe

[View in browser]( [The Spill Logo] Proprietary Data Insights Financial Pros’ Top Creative Design & Development Stock Searches in the Last Month Rank Name Searches #1 'Adobe Systems Inc 154 #2 'Unity Software Inc 109 #3 'Autodesk Inc 86 #4 'Synopsys Inc 58 #5 'Ansys Inc 22 #ad [We make understanding investing a lot easier]( Brought to you by [InvestingChannel]( [Tickers Trending Among FinPros & Retail Investors]( [InvestingChannel - Tickers Trending Among FinPros & Retail Investors]( Once every quarter, we compile millions of Financial Professional and Retail Investor's stock searches across our 100+ financial sites. We reserve this exclusive report for our newsletter subscribers so you can learn about the stocks and industries that you should keep an eye on. This info can help you decide what to do in your portfolio – so you can protect the money you have and generate bigger gains. [Click here now to download the FREE Trackstar Q1 2023 Report.]( AI Is Driving Innovation and Growth at Adobe Today’s buzzwords are “Generative AI.” While there are plenty of stocks that claim to leverage the technology, few actually do. You may not realize Adobe Systems (ADBE) is a big player in this space. However, financial pros certainly know about the company, as they search out the ADBE ticker at a rate 50% higher than the next design and development stock, according to our TrackStar data. A company once only known for PDF files has transformed itself into a digital art and design powerhouse, whether it’s digital signatures or graphic design. Unlike many of its AI peers, like Microsoft, shares of Adobe are off their all-time highs by almost 40%. Combined with the recent 25% rally, it’s probably why financial pros are taking a hard look. Adobe’s Business If you've ever opened a PDF file, edited a photo, or watched an online video, chances are you've used an Adobe product. Adobe is a global leader in digital media and digital marketing software with a mission to change the world through digital experiences. The company serves customers worldwide in many industries, such as education, entertainment, government, healthcare, and retail. [Results] [Source: Adobe Q1 2023 Earnings Report]( Like many software companies, Adobe pivoted from software to subscription sales using its cloud-based software products and services, such as Adobe Creative Cloud, Adobe Document Cloud, and Adobe Experience Cloud. [Products] [Source: Adobe Website]( Adobe isn’t just a pioneer in digital media and marketing but also in artificial intelligence (AI). AI enhances its products and services, making them more powerful, intelligent, and personalized. For example, Adobe's AI platform, Adobe Sensei, powers features such as content-aware fill, face-aware liquify, auto-tagging, and smart cropping. Adobe Sensei also enables customers to create and deliver engaging and relevant digital experiences across different channels and devices. Financials [Financials] Source: Stock Analysis For a company with an almost $200 billion market cap, Adobe has done a fantastic job growing sales while holding margins steady. With a ridiculous free-cash-flow margin of ~40%, management has reduced share count by 5% since 2019, which used up a good chunk of the free-cash-flow, while it also paid down some of its long-term debt. The company now holds $1.5 billion more in cash than its $4.1 billion in debt. Valuation [Valuation] Source: Seeking Alpha Adobe isn’t cheap by pretty much any standard. But then again, none of its peers are. All of them trade at P/E ratios above 40x, while Unity Software (U) isn’t profitable, nor does it generate positive cash flow. The one metric where Adobe isn’t half bad is price-to-cash flow at 25.6x, though it’s still expensive relative to most technology stocks. Growth [Growth] Source: Seeking Alpha Adobe shines when it comes to consistent growth, whether its revenues or earnings. Many of its peers exhibit higher growth rates, but that’s largely due to their smaller size. Notably, Adobe doesn’t expect its EBITDA, a decent proxy for cash, to grow much next year. Profitability [Profit] Source: Seeking Alpha When it comes to margins, Adobe isn’t just the top of the pack; it’s consistent. Importantly, its net income margin of 26.3% is the highest of the group, while the free-cash-flow margin is only edged out by Autodesk (ADSK). [Limited Time Offer: Invest in Atakama before June 30th!]( Time is running out to invest in Atakama, the disruptive force in the $2B cybersecurity market. Secure your opportunity to support innovation and diversify your portfolio. Don't miss out on this Pre-IPO investment chance. Act now before June 30th! [Invest Now]([Ad] Our Opinion 9/10 You might be wondering why we’d give such an expensive stock a 9/10. Looking back at its history Adobe now trades at or below its price-to-earnings and price-to-cash flow averages going back almost a decade. While it could face a large correction, we see the upside potential with AI as too lucrative to ignore. [-facebook-share]( [-twitter-share]( [-linkedin-share]( [-email-share](mailto:?body= https%3A%2F%2Finvestingchannel.com%2F%3Fp%3D583028?utm_medium=ic-nl&utm_source=108983 ) News & Insights Just Spilled - [Is Advanced Auto Parts worth investing in?]( - [Markets are volatile, stay on top of Alternative Investments like Real Estate, Private Equity…]( - [Microsoft’s $10 Billion Bet Turns Heads]( - [A Harvard Case Study on What NOT to do]( [News & Insights-facebook-share]( [News & Insights-twitter-share]( [News & Insights-linkedin-share]( [News & Insights-email-share](mailto:?body= https%3A%2F%2Finvestingchannel.com%2F%3Fp%3D583028?utm_medium=ic-nl&utm_source=108983 ) [We want to hear from you. Let us know your thoughts by clicking here]( [Ads][Link]( [InvestingChannel Logo](#) Follow us on: [Facebook Logo]( [LinkedIn Logo]( [Twitter Logo]( [Instagram Logo]( To ensure delivery of all emails, [allow us on your list]( Spill&email=TheSpill@news.investingchannel.com). Manage your subscriptions with our [preference center](. [Unsubscribe here.]( View our privacy policy [here](. Copyright ©2023 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc., newsletter is for information purposes only and is based on opinion. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or eliminate losses. InvestingChannel, Inc., makes no representation or implication that using any of the methodologies or systems in this newsletter will generate returns or insure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions.