10 Most Undervalued High Quality Stocks to Buy According to Analysts

4. Adobe Inc. (NASDAQ:ADBE)

Forward P/E Ratio: 21.87 

Number of Hedge Fund Holders: 117

Analyst Upside Potential: 30.75%

Adobe Inc. (NASDAQ:ADBE) is a global technology giant that helps people and businesses create, manage, and deliver digital content across various platforms. On March 5, Barclays analyst Saket Kalia maintained a Buy rating on the stock with a price target of $567.

During the fiscal fourth quarter of 2024, the company achieved a record revenue of $21.51 billion, marking an 11% year-over-year growth both as reported and in constant currency. The Digital Segment revenue was one of the top performers with revenue increasing 12% year-over-year to reach $15.86 billion. Moreover, net new Digital Media Annualized Recurring Revenue exceeded $2.0 billion, marking a significant milestone for the company.

Adobe Inc. (NASDAQ:ADBE) is at the forefront of AI innovations the company released its Adobe Firefly, which allows users to create stunning visuals, text effects, and illustrations with simple text prompts. It has expanded capabilities for real-time AI-assisted edits, video content generation, and 3D asset creation. Polen Focus Growth Strategy in its Q4 2024 investor letter stated that the company came under pressure due to delays in effectively monetizing its generative AI Firefly. However, the fund remains optimistic that even if other open-source platforms develop generative AI companies and professionals will still need Adobe Inc. (NASDAQ:ADBE) to edit content. It is one of the most undervalued high-quality stocks to buy according to analysts.

Polen Focus Growth Strategy stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its Q4 2024 investor letter:

“Zoetis and Adobe Inc. (NASDAQ:ADBE) were also notable absolute detractors. Adobe is another holding that’s come under pressure this year due to concerns about delays in the company’s ability to monetize its generative AI Firefly offering. Our research suggests that even if open-source generative AI tools proliferate, creative professionals will still need to curate and edit that content in Adobe tools.”