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Investing.com - Citizens JMP analyst firm reiterated its Market Perform rating on Adobe (NASDAQ:ADBE) Monday as the software giant faces new competitive developments. According to InvestingPro data, Adobe maintains a "GOOD" overall financial health score, with 25 analysts recently revising their earnings estimates upward.
The rating maintenance comes after privately held competitor Canva announced its intent to acquire MagicBrief, an AI-powered ad platform that helps marketers understand and respond to high-performing content strategies and formats.
Adobe stock has fallen 15% year to date, compared to a 1% increase for the Russell 3000, according to the research note from Citizens JMP.
MagicBrief completed a $1.3 million pre-seed funding round in July 2023, led by Blackbird ventures, before attracting Canva’s interest.
While no official disclosure has been made regarding the acquisition price, some sources indicate Canva paid approximately $10 million for MagicBrief, according to Citizens JMP’s research.
In other recent news, Adobe has made significant strides in its product offerings and financial outlook. The company launched its Firefly mobile app for iOS and Android, expanding its AI-assisted content creation platform to mobile devices. This new app includes features like text-to-image and text-to-video, along with integrations from several third-party AI models. Adobe also reported that its Firefly platform has seen a 30% increase in traffic quarter over quarter, with paid subscriptions nearly doubling in the same period.
On the financial front, Adobe’s first-quarter revenues reached $5.87 billion, growing 11% on a constant currency basis, slightly exceeding estimates from TD Cowen. Despite this, TD Cowen lowered its price target for Adobe to $470 from $490, maintaining a Hold rating due to sector valuation pressures. Similarly, Citi adjusted its price target to $450 from $465, expressing skepticism about Adobe’s long-term AI growth potential, although it noted some positive developments in AI monetization efforts.
In contrast, Bernstein raised its price target for Adobe to $530 from $525, citing potential revenue growth driven by AI and stock buybacks. DA Davidson also reiterated its Buy rating with a $500 price target, emphasizing Adobe’s disciplined expense management and strong market position in AI. These developments reflect a mixed but generally optimistic outlook from analysts regarding Adobe’s future performance and strategic initiatives.
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