Adobe Systems (ADBE)

Since then, Adobe has been a show-me stock. Last week, the company showed big by delivering blow-out top- and bottom-line beats and raising its full-year forecast. For Q1-2023, EPS came in at $3.80, beating the expected $3.68. Likewise, sales of $4.66 billion beat $4.62 billion, a quarterly record, despite a strong USD. Earnings climbed 13%. Adobe raised its forecasted adjusted EPS for 2023 from $15.15 – 15.45 to $15.30 – 15.60 while Wall Street guided $15.29. Also, Adobe bought back five million shares in the quarter, and predicted 9% earnings growth for 2023. Read Adobe and Algonquin Power: Out of the Penalty Box? for our full analysis.

It is a great business selling subscription software. It had 13% revenue growth in its last report. Trades at 25X earnings with a great balance sheet and gross margins of 90%. It is trying to make an expensive acquisition but this shouldn't affect the stock. It is very undervalued and should double earnings over the next few years.    Buy 20  Hold 21  Sell 0

After the bell today, they reported a major sales and earnings beat, and raised full-year forecast a lot. Will their numbers get the attention they deserve, up against the Credit Suisse meltown today? Adobe shares are up from its September lows, but still way down from its 2021 highs. They may be showing secular growth following a tough period. Their innovations drive their growth engine.

It has been under pressure due to a $20 billion acquisition which could be blocked. It is a phenomenal company with great free cash flow and trading at 20X earnings.

They report Wednesday. The government is trying to block a merger that Adobe feels will make it more competitive. Also, Adobe could face a challenge from ChatGPT technology that could create problems for copyright holders, who are big users of Adobe. Listen to Adobe's earnings call next week.

Subscription based. Accretive technology. Around 90% market share in the space. Figma purchase caused stock to fall. PE in high 20s. Now $11 EPS in 2023, expects $18-19 EPS by mid-decade. Closely aligned with AI. Huge, bright future. No dividend.

It is one of the best businesses the world has ever seen. Margins on its products are 90%. It has a great balance sheet and is guiding to double digit revenue growth. It should not be lumped in with the other big techs.