10 Best SaaS Stocks To Buy Now

2. Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Investors In Q1 2024: 108

YTD Return: -11.9%

Adobe Inc. (NASDAQ:ADBE) is one of the biggest enterprise software companies in the world. The firm reported a blockbuster set of first quarter earnings in June 2024 which sent its shares soaring by a whopping 17%. The results saw Adobe Inc. (NASDAQ:ADBE) report $5.3 billion in revenue and $4.48 in earnings. These beat analyst estimates of $5.29 billion and $4.40, respectively. Investors were also impressed by Adobe Inc. (NASDAQ:ADBE)’s digital media revenue of $487 million, which beat analyst estimates of $434 million and its guidance of $460 million for the division also beat estimates of $435 million. Following the results, Barclays raised Adobe Inc. (NASDAQ:ADBE)’s share price target to $650 from $630 keeping an Overweight rating on the shares. At the heart of the upgrade was the bank’s optimism for Adobe’s AI platform, which it believes can prove to be a boon for the SaaS platform.

The average of 32 one year analyst share price targets for Adobe Inc. (NASDAQ:ADBE) is $569.58. This marks an 8.4% upside over the recent closing share price of $525.31. Adobe Inc. (NASDAQ:ADBE)’s three year annualized revenue growth rate is 14.68%. Aristotle Capital Management mentioned the firm in its Q1 2024 investor letter. Here is what the firm said:

Adobe, the content creation and publishing software provider, was the leading detractor for the quarter. The company continues to benefit from its shift to a subscription model, with almost 95% of its record $19.4 billion in fiscal year 2023 revenue coming from subscriptions, while continuing to invest in innovation that expands its addressable market. Nevertheless, investors seem concerned with some of the lower-cost alternatives entering the market, including Sora, an OpenAI platform that produces videos from text. While much attention has also been placed on Adobe’s Firefly, a generative AI service that has already produced more than 6.5 billion images since launch in March 2023, we will take our time to understand Adobe’s AI monetization strategy. In the meantime, we continue to believe that the combination of Express, Firefly, Creative Cloud, Acrobat and Experience Cloud provides a unique solution to address all the content and data needs of clients and their management of the customer experience. In addition to innovation, Adobe continues to generate and return cash to shareholders, exemplified most recently by its new $25 billion stock repurchase program.