Adobe Q4 FY11/22 Earnings Review
It May Be Up The Creek But It Certainly Has Paddles
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Fashioned In The Creek. Comes With Inbuilt Paddles.
Named after the Adobe Creek that ran just behind the house of one of the founders, Adobe has re-invented itself time and again as the world has moved from offline to online to real-time content creation and consumption. For the most part this has been by acquisition - high priced, high risk acquisition - and lately by a move to subscription, itself risk-laden. So when the market proferred its view on the proposed $20bn acquisition of the pipsqueak Figma - and that view was, SELL AND RUN FOR THE HILLS - likely nobody steeped in Adobe DNA was too worried. Figma is the next reinvention for ADBE, if the company can get the deal closed in the face of regulatory opposition.
Adobe defied gravity for much of 2022 vs. the rest of the tech pack, then finally gave up the ghost on its Q3 earnings. Whether that was the earnings, the outlook or the what-nonsense-is-this-now buy of Figma ($20bn for thin air if you ask grandpa, or $20bn to defend your $150bn monopoly business if you ask us), we know not. Anyway the stock dumped, we started coverage (finally responding to @1markb44's ask!!) at Accumulate and moved to Hold as the stock started the long slow climb back towards the light.
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