Adobe Turnaround Potential Amid AI Growth

17 days ago

Jose Najarro

"Now jumping back here to Adobe, why I believe the market is kind of eh a little bit wrong at least in the bearish thesis. We are looking and we can see that trailing 12 months of revenue for this company $23 billion in November 2025th. That continues to go up every quarter, and I believe for this upcoming year, fiscal year of 2026, they expect somewhere around $26 billion. Now, because of the massive bearish thesis, this company's valuation has gone down dramatically, but they're still very strong in operating cash flow. Free forward price to free cash flow is amazing – similarly, forward PE ratio is around 14 compared to a median of 23.6 – showing that the stock is extremely cheap relative to its fundamentals."

The speaker outlines a bullish turnaround thesis for Adobe (ADBE), noting that despite a severe downturn in past performance, Adobe's trailing 12-month revenue is growing and its valuation metrics, including a low forward PE ratio, are attractive. This suggests that the market might be mispricing the stock, with potential for a strong recovery in fiscal year 2026.

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