u/ac_AgenCy ·
Reddit — r/ValueInvesting
· June 12, 2026 at 17:27
· ⬆ 17 pts
· 💬 111 comments
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AI Summary
Summary
The post warns that Adobe (ADBE) is a value trap: a low sub‑10x forward P/E is misleading because earnings may shrink as AI‑driven open‑source tools erode its creative suite’s competitive moat, and aggressive buybacks artificially prop up EPS.
The author argues that without organic top‑line growth, ADBE will underperform the S&P 500 over the next 5 years and advises against investing based solely on a cheap multiple.
Quality assessment: Speculative thesis with anecdotal reasoning; lacks detailed financial modeling but raises a plausible competitive risk. The top comments provide contradictory hard data (accelerating revenue growth), making the post more of a cautionary opinion than well‑researched DD.
Score17
Comments111
Upvote %61%
▶ Full Post Text
I've seen far too many bullish posts about adbe. A low P/E ratio doesn't equal value!
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A sub 10x forward P/E looks cheap for a company with high gross margins, but it's only cheap if the E (Earnings) doesn't shrink.
In 5 years, as AI generation becomes entirely open-source, localized, and embedded into basic operating systems, Adobe's legacy creative suite risks becoming a specialized utility rather than a growth engine.
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Once the current aggressive share buybacks ($25B program) run their course to artificially prop up EPS, the lack of organic top-line growth will be exposed.
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To put it simply , I have very high conviction that adbe will not beat the s and p 500 over the next 5 years and thus there is no point in investing now. Please don't get blinded just because you think it's cheap. The smart money can see the risks to growth
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ADBE trades at ~10x forward P/E but the author believes earnings will shrink due to AI disruption and that current buybacks mask weak organic revenue growth. If the market reprices ADBE for lower future earnings, the stock could de‑rate further, creating a short opportunity. Short ADBE as a structural‑value trap play, betting that the current multiple contraction is justified by fading growth prospects. Revenue growth is actually accelerating (Q1 2026 +12% YoY, per top comment); Adobe is actively integrating AI tools, and enterprise stickiness remains high. A sustained earnings beat or AI‑assisted product success could invalidate the thesis.