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San Jose, California-based Adobe Inc. (ADBE) is a diversified software company operating through Digital Media, Digital Experience, and Publishing and Advertising segments. With a market cap of $163.4 billion, Adobe operates as one of the largest software companies in the world.
The software giant has significantly underperformed the broader market over the past year. Adobe’s stock has plummeted 17.9% over the past 52 weeks and approximately 11% on a YTD basis, compared to the S&P 500 Index’s ($SPX) 11.9% gains over the past year and a marginal 64 bps dip in 2025.
Narrowing the focus, Adobe has also lagged behind the industry-focused iShares Expanded Tech-Software Sector ETF’s (IGV) 26.3% surge over the past year and 2.7% uptick in 2025.
Adobe’s stock prices tanked 13.9% in the trading session after the release of its mixed Q1 results on Mar. 12. Driven by solid momentum, the company’s total revenues for the quarter surged 10.3% year-over-year to $5.7 billion, surpassing the Street’s expectations by 1.1%. Meanwhile, the company’s non-GAAP net income grew 8.7% year-over-year to $2.2 billion, surpassing analysts’ projections.
Although the company’s growth momentum has remained robust, it has observed a notable slowdown. Adobe’s remaining performance obligation (RPO) , a key indicator of its topline growth, which surged 16% year-over-year to $17.6 billion in Q1 2024, increased by a much more modest 12% year-over-year to $19.7 billion in Q1 2025, missing analysts' expectations and shattering investor confidence.
For the current FY 2025, ending in November, analysts expect ADBE to deliver an 11.3% year-over-year growth in earnings to $16.58 per share. The company has a solid earnings surprise history. It has surpassed the Street’s bottom-line estimates in each of the past four quarters.
Among the 33 analysts covering the ADBE stock, the consensus rating is a “Moderate Buy.” That’s based on 21 “Strong Buy,” one “Moderate Buy,” 10 “Hold,” and one “Moderate Buy” rating.
This configuration is slightly more bullish than two months ago, when one of the analysts gave a “Strong Sell” recommendation.
On Apr. 23, Piper Sandler analyst Brent Bracelin reiterated an “Overweight” rating on ADBE, but lowered the price target from $600 to $500.
As of writing, ADBE’s mean price target of $503.63 represents a 27.2% premium to current price levels, while its street-high target of $703 suggests a staggering 77.6% upside potential.
