Adobe (ADBE) Net new Digital Media Annualized Recurring Revenue (“ARR”) To Watch

Adobe, a leader in graphic processing software, holds approximately 80% of the market share and around 20% of the global document processing software market. The company operates on a subscription-based business model, with over 90% of its revenue coming from subscriptions.

Adobe has a strong track record, consistently beating earnings expectations every quarter since August 2019. However, this does not necessarily guarantee a positive market reaction. In three of the past four quarters, Adobe's stock has declined following earnings reports. Thus, even if earnings exceed expectations, the market response may not be favorable. If data shows a slowdown in AI investments or AI efficiency gains falling short of expectations, the market reaction could be even more negative.

Based on 27 Wall Street analysts offering 12 month price targets for Adobe in the last 3 months. The average price target is $618.00 with a high forecast of $700.00 and a low forecast of $450.00. The average price target represents a 7.58% change from the last price of $574.48.

If we looked at how Adobe have been navigating the AI hype, there have not been significant improvement after the last surge by Adobe after its previous earnings.

Even though Adobe have a surge in its stock price after its previous quarter earnings, but it has been trading range bound between $500 to $575, so I am looking to see if there is a better chance for Adobe to break through $575.

What would be interesting would be Adobe subscription - Net new Digital Media Annualized Recurring Revenue (“ARR”) to be better than previous quarter.

From the technical, looks like Adobe has formed a bearish crossover in MACD recently, but there is a potential upside moving from the KDJ side.

So it looks like Adobe need to clear the $575 level. and I will be watching the price action closely today (11 Sep).

Adobe multi timeframe is showing a strong uptrend, so there might be a chance of earnings surprise to push the price higher above $575.

We might need to see more demand buying from investors.

Adobe might face some challenges as consumers are having more options in terms of digital media software, and we need to understand how Adobe AI enhanced software have been contributing to its revenue.

I am watching the stock price level closely as Adobe need to clear $575 in order to give a clear signal for upside.

Appreciate if you could share your thoughts in the comment section whether you think Adobe would be able to provide an earning surprise.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.