Adobe as a Future Share Cannibal Trade Call

about 1 month ago

Ryan Henderson

"My number one company is Adobe. They kind of have been ramping buybacks over the last couple of years as the threat from AI has knocked the stock down and led to multiple compression. Today, I think they have like a 7% or 8% buyback yield. But with stock-based comp, they are reducing total shares outstanding by about 5.5% annually."

Adobe (ADBE) is highlighted as a potential future share cannibal due to its increasing commitment to buybacks, consistent revenue growth of around 10% per quarter and a solid buyback yield in the high-single digits. Although historically not known as a share cannibal, recent dynamics, particularly due to AI-driven stock compression, present an opportunity if the stock remains undervalued.

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