Adobe played a great role in the development of the computer publishing industry and made a huge contribution to the growth of digital media. The company has developed an enormous number of products that today help in marketing, application development, publishing, etc. Adobe Inc. is the participant that accelerated the rise of the digital content industry. Its solutions make the processes of publishing faster and more efficient. Nonetheless, these days, the business is facing serious competition against such giants as Microsoft and Google. How does it impact the Adobe stock price today? Is Adobe stock a buy in 2022? Here is what we’ve managed to find out.
Performance of the Company
In 2021, the Adobe Company reported annual revenue of $15.79 billion. This is a 23% increase, compared to the results of 2020. The biggest share of this total amount belongs to its Digital Media business – $11.55 billion, while the Digital Experience revenue is $3.87 billion. At the beginning of 2022, the pace of revenue growth isn’t as significant. In the first quarter, Adobe performed a 17% growth, which amounts to $3.11 billion in revenue from the Digital Media business. Document revenue showed the best digits, compared to the first quarter of the previous year, – a 26% increase ($562 million). When talking about the first half of the current year, we should mention that Adobe left Russia and Belarus due to the Russian invasion of Ukraine. Because of this, the annual revenue generated by the business is forecasted to decrease by $75 million. In terms of annual performance, this is not a significant loss for the company.
Key Events
Between 2012 and 2015, the ADBE stock managed to triple its price and rise from $30 up to $90 in just four years. This happened despite the declining earnings of the company. The major reason for such growth was a switch to the subscription-based model. Additionally, the company managed to generate bigger revenue from the Adobe Marketing Cloud.In 2019, the ADBE stock price surged by almost 48%. At the end of that year, the stock was closing at around $330. This happened due to the unexpected quarterly updates. New products and solutions quickly gained popularity, which helped the company to exit the year with $8.4 billion in digital media annual revenue, which was almost $2 billion higher than the year before.On November 19, 2021, ADBE stock reached its historic maximum of $688.37. However, in February 2022, the stock lost around 12.5% due to the extreme volatility of the market. After the announcement of the shut-down of businesses in Russia and Belarus, caused by the Russian invasion of Ukraine, the stock price fell 10% more.
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Pros
Adobe is showing strong quarterly results that meet the expectations of investors. Although the pace of the revenue growth might be not very significant, the dynamics remain positive.Adobe is the market leader in the industry of Digital Media.The company has a good capital return program and manages to remain debt at sustainable levels. This indicates that the company will be capable of showing stable financial performance.Adobe Inc. is expected to generate significant revenue through the adaption of Creative Cloud. The subscriber base, bringing 90% of total revenue, might grow in the nearest future with the introduction of new products.Over the recent year, Adobe has been showing successful launches of innovative products that are capable of increasing the customer base of the company.
Cons
Abode has to compete against such industry giants as Microsoft, Apple, Google, and others. This brings additional concerns related to the potential success of new products and services.Some Adobe products have limited functional features, compared to multi-functional applications developed by main competitors of Adobe.
Final Thoughts
Experts predict that in 2022 the growth of Adobe’s yields won’t be as fast. Nonetheless, the business will remain successful and competitive soon. We believe that its innovative products can help the company to reach new heights and increase the ADBE stock price. Despite the recent volatility, we consider that this asset is a good long-term investment to be made today.
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