Thoughts on ADBE Stock? Failing Business, Generational Buy, or Somewhere in the Middle?
u/Silent_Storage7341 ·
Reddit — r/ValueInvesting
· May 28, 2026 at 03:10
· ⬆ 24 pts
· 💬 49 comments
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Summary
The author presents ADBE trading at historically low P/E (14 trailing, 10 forward) amid AI disruption fears, while noting strong fundamentals: 13% revenue growth, 89% gross margins, and raised guidance with 3x ARR uplifts from AI products.
The thesis is a contrarian value proposition: the stock may be a generational buy if the market overestimates AI disruption, but risks from competition are acknowledged. The author seeks community input rather than stating a clear position.
Quality assessment: This is a thoughtful, semi-research-based discussion post (not deep DD) that synthesizes 10‑K risks, earnings call optimism, and valuation metrics. Moderate quality, leaning toward speculative but data‑informed.
Score24
Comments49
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Just wondering what everyone’s thoughts on ADBE at this price of $240 are. The company is trading at historically low valuations (14 P/E and 10 forward P/E). I understand that the software sector as a whole has a lot of fears over competition and disruption due to AI. ADBE seems to be in a category (creative tools, productivity and marketing) where AI is predicted to be the most disruptive. I skimmed through the 10K report. The competition and risks section light up red flags everywhere. Yet, the conference call from the last earnings report and financial statements paint a much different picture than the current narrative on the company. Revenue grew 13% year over year, EPS grew 11%, gross margins are still very strong at 89%, they also raised guidance. They talk about all the ways that they are implementing AI into their products and how they are seeing 3X ARR increases directly tied to their AI- driven solutions). I know this company is very scary to invest in, and seems like it is headed for doom and gloom, with competition coming from every angle. Is anyone taking a stab at it at these levels? Or have you previously invested in it? Has your thesis changed? What is your outlook for the company in the next 3-5 years? Are there any other companies that you prefer to invest in the SaaS sector, that you feel are safer and just as undervalued as Adobe?
ADBE trades at 14x trailing P/E (10x forward) with 11% EPS growth, 89% gross margins, and AI‑driven ARR accelerating 3x. The market’s AI disruption fear creates a potential margin of safety if Adobe successfully integrates AI into its ecosystem (as conference calls suggest). The low valuation combined with solid execution makes ADBE a speculative value opportunity, but competitive risks (Canva, generative AI tools) keep it a watch rather than a confident buy. Faster‑than‑expected displacement by AI‑native tools, slowing subscription growth, or margin compression from AI‑related costs.
This Reddit post, published May 28, 2026,
features u/Silent_Storage7341
discussing ADBE.
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