Adobe: Our Top Idea For 2025 Now Trading At A 30% Discount To SaaS Peers
Portfolio Pulse from
Adobe is currently trading at a 30% discount compared to its SaaS peers like Microsoft and Salesforce, despite having similar growth expectations for 2025. Adobe's Q4 results showed strong performance with 11% YoY revenue growth and record Digital Media ARR. Although 2025 guidance was slightly below expectations, Adobe's recurring revenue, pricing power, and AI advancements suggest potential for continued growth.
December 20, 2024 | 7:30 pm
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NEUTRAL IMPACT
Salesforce trades at over 30x forward earnings, higher than Adobe, despite similar growth expectations for 2025.
Salesforce's higher valuation compared to Adobe, despite similar growth expectations, suggests that investors may need to reassess the premium they are paying for CRM shares.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 50
NEUTRAL IMPACT
Microsoft trades at over 30x forward earnings, higher than Adobe, despite similar growth expectations for 2025.
Microsoft's higher valuation compared to Adobe, despite similar growth expectations, suggests that investors may need to reassess the premium they are paying for MSFT shares.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 50
POSITIVE IMPACT
Adobe is trading at a 30% discount to its SaaS peers, despite strong Q4 results and growth potential. The company's recurring revenue, pricing power, and AI advancements support continued growth.
Adobe's current valuation at 21.6x forward earnings is lower than its peers Microsoft and Salesforce, which trade at over 30x. Despite slightly below-expectation 2025 guidance, Adobe's strong Q4 performance and growth drivers like recurring revenue and AI advancements suggest potential upside, making it attractive to investors.
CONFIDENCE 95
IMPORTANCE 90
RELEVANCE 100