• Adobe was founded in 1982 by John Warnock and Charles Geschke 
• The company went public in 1986 - listing its shares on the Nasdaq, under the ADBE ticker
• The stock is a component of the S&P 500 and the Nasdaq-100 - two of the most widely followed stock indexes in the world
• Adobe's Creative Cloud includes over 20 software applications with a total of more than 22 million registered users 
• Adobe is one of the largest software companies in the world, employing over 23,000 people 
• Adobe has acquired several companies over the years, including Macromedia, Behance, and Magento
• As of April 26, 2023, Adobe had a market capitalization of over $167 billion, making it one of the largest software companies in the world
• Despite its continuous profitability, Adobe does not pay dividends to shareholders 
• Adobe has a strong presence in the digital document market, with its Acrobat and PDF products being some of the most widely used pieces of software in the world
• Adobe stock reached its all time high closing price of $688.37 on November 19, 2021, during the Covid-19 pandemic

Adobe stock experienced massive growth during the Covid-19 pandemic. The stock rose from $220 in 2018 to almost $690 in 2021. However, after the lockdown measures were lifted and people returned to normal work settings, the stock started to correct itself. Still, Adobe stock has increased by over 60% over the past five years. 

While a bulk of this growth has come from Adobe users working from home during the lockdowns, Adobe has managed to maintain an impressive growth momentum and is currently trading at a more favorable valuation. 

In terms of financial performance, Adobe’s fourth-quarter results from 2022 show a healthy 9.22% increase in quarterly revenues YoY, while net earnings fell by only 1.5%. To $1.25 billion. 

Net profit margin fell by 9.8% to 26.79%. 

Adobe has a beta of 1.31, which makes it more volatile than the broader market, thus, representing solid opportunities for short-term traders and long-term investors alike. 

While Adobe has bounced back from its $275 low in September 2022, the stock could be a solid buy closer to the $300-$330 range. 

Dividend investors may be disappointed by the stock, as Adobe does not offer dividends to its shareholders. However, Adobe’s revenue streams are well-diversified and with a great growth track record, investors should look out for the stock in the near future. 

Before putting your capital at risk, it is crucial to understand the inherent risks and opportunities associated with being an Adobe shareholder. Doing so can help you decide whether Adobe’s stock is a welcome addition to your portfolio. 

Pros

• Strong financial performance - Adobe has a long track record of revenue and earnings growth, which has a positive effect on its stock price in the long run 
• Diversified business - Adobe has subsidiaries offering different services and its own suite of products serves professionals from different occupations, which gives the company much-needed flexibility
• Innovation - as a software company, Adobe is constantly innovating and looking for ways to get a competitive advantage, which is a welcome sign for investors
• Room for growth - the multimedia software market has been growing rapidly, which gives Adobe a lot of opportunities to keep up with its growth projections 

Cons

• Dependence on subscriptions - a majority of Adobe’s revenue comes from subscriptions to its Creative Cloud infrastructure, which makes the company susceptible to economic downturns 
• Competition - Adobe faces competition from a variety of multimedia companies big and small, as the industry does not have a very high barrier to entry
• Volatility - Adobe stock has a beta figure of 1.31, which makes it more than 30% more volatile than the broader market
• High valuation - despite a market correction wiping out a lot of Adobe’s pandemic growth, the stock is still fairly overvalued, which is unfavorable for value investors 
• No dividends - Adobe does not pay dividends on its stock, which is a downside for income-focused investors
• Reliance on key personnel - Adobe’s vision and future plans revolve around the decision-making of key organizational figures, such as Shantanu Narayen, who has been the CEO of the company since 2007 

• Adobe is one of the most well-known software companies around the world, with millions of professionals in creative industries using its Creative Cloud product suite, such as Photoshop, Illustrator, InDesign, etc 
• The company listed its shares on the Nasdaq exchange in 1986 and is now a part of the S&P 500 and Nasdaq-100 indexes, which are two of the most important benchmarks for the U.S stock market
• Adobe stock has gained over 60% over the course of five years and had gained over 130% at its peak in 2021
• Adobe’s financials show solid revenue growth and stable profitability, which keeps the company in a healthy position going forward 
• Adobe does not pay dividends to its shareholders, which is one of the few downsides of investing in the company