CA - Adobe: Quality At A Digestible Premium

2024-06-17 08:00:00 ET

Summary

• In light of reporting a double beat for Q2 FY2024, Adobe's stock came back to life late last week, reversing most of its year-to-date losses in one fell swoop.
• While its post-ER bounce has left Adobe stock trading at a sizeable premium, ADBE's long-term risk/reward is attractive enough to justify fresh capital.
• In this note, we shall review Adobe's Q2 report and go over its valuation. Learn more now.

Breaking Down Adobe's Q2 FY2024 Report

Considering Adobe's ( ADBE ) (ADBE:CA) post-ER pop of ~14.5% to ~$525 per share, it is natural to assume that the software giant just delivered a blowout quarter. Now, while Adobe beat consensus street estimates and raised guidance for FY2024 [with Narayen & Co. highlighting their GenAI opportunity], Adobe's revenue beat was wafer-thin, and updated guidance came more or less in line with consensus estimates heading into the Q2 print....

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