Analyst Derrick Wood from TD Cowen maintained a Hold rating on Adobe and decreased the price target to $420.00 from $470.00.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Derrick Wood’s rating is based on a combination of factors that highlight both strengths and challenges for Adobe. The company’s revenue growth in the third quarter was slightly above expectations, and there was an improvement in the Digital Media segment, driven by price increases and strong performance in AI products like Acrobat AI Assistant. However, the overall revenue growth rate has decelerated, and future guidance suggests further slowing, which raises concerns about competitive pressures.
Derrick Wood also noted the positive impact of Adobe’s AI initiatives, which have exceeded management’s targets and contributed significantly to the company’s annual recurring revenue. Despite these advancements, the growth deceleration and competitive dynamics have led to a cautious outlook. As a result, the price target was adjusted to reflect valuation pressures in the SaaS sector, and the Hold rating was maintained to reflect these mixed signals.
According to TipRanks, Wood is a 5-star analyst with an average return of 9.9% and a 54.84% success rate. Wood covers the Technology sector, focusing on stocks such as Oracle, Adobe, and Salesforce.
In another report released yesterday, Mizuho Securities also maintained a Hold rating on the stock with a $400.00 price target.