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Let's talk about the popular Adobe Inc. (NASDAQ:ADBE). The company's shares saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. While good news for shareholders, the company has traded much higher in the past year. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Adobe’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Is Adobe Still Cheap?
Great news for investors – Adobe is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is $610.76, but it is currently trading at US$381 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Adobe’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
View our latest analysis for Adobe
What does the future of Adobe look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 33% over the next couple of years, the future seems bright for Adobe. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? Since ADBE is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on ADBE for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ADBE. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.