Making the Bull Case for Adobe?

Adobe definitely seems to have the wind at its back these days, with its Flash technology ubiquitous in web video. That edge was reinforced yesterday with a widely-loved unveiling of the company’s Apollo technology at the Engage event yesterday. The latter is a compelling new platform for building online applications, as well as replicating that functionality when (perish the thought) you’re not connected to the InterWeb.

Is it time to make a bullish case for the company’s stock? Out of 30 analysts covering the stock, 22 currently have it as a Buy or Strong Buy, which is slightly more boosters than a quarter ago. The stock is up a teensy 2% from where it was at this time a year ago, and down almost 2% from where it started the year.

From a valuation point of view, the company’s stock is trading at 23x forward earnings, while it is forecast to turn in something like 17% earnings growth. That doesn’t sound compelling, unless investors are underestimating the contribution of the new Apollo platform. Are they? More in a subsequent post.

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  5. Yahoo Results: Light or Not?

Comments

  1. Gordon Mohr says:

    Adobe’s work achieving Flash installation ubiquity has been impressive. Then with FLV they solved web video — enabling YouTube and its ilk — in a way that escaped Real, Apple, and MSFT for years. (I wonder if Adobe is smarting that more of the value created by FLV isn’t flowing to them.)
    An interesting angle is Adobe’s P2P efforts and recent work with Verisign/Kontiki — as reported at GigaOM.
    “Adob2p” oould be really significant when coupled with their video prowess — some thoughts here. Adobe could slipstream into a future FlashPlayer update all the parts necessary for a seamless, web-integrated, P2P-enhanced video service — something as nice as ITunes or Joost with “no” client download (beyond FlashPlayer).

  2. Gordon Mohr says:

    [Hmm, I commented on this over 24 hours ago and my comment seems lost in moderation purgatory. Trying again...]
    Adobe deserves hella credit for Flash ubiquity. Then they solved web video better than Real/Apple/MSFT. Adobe FLV is as responsible for YouTube as YouTube itself. (Might they be miffed about not getting as much money?)
    Adobe’s p2p/media work with Verisign/Kontiki could be big. (Reported at GigaOm; my comments.) What if they solve P2P and DRM like they did video with FLV? Adobe could slipstream into a future FlashPlayer everything necessary for a seamlessly web-integrated, mildly-DRMed, p2p-enhanced alternatives to ITunes/Joost — with “no” client download (beyond the FlashPlayer itself).