3. Adobe Inc. (NASDAQ:ADBE)
Year-To-Date Decline as of November 25: 40.77%
Number of Hedge Fund Holders: 93
Adobe Inc. (NASDAQ:ADBE) is the global leader in creative software solutions, with a portfolio that includes industry-leading Creative Cloud applications such as Photoshop, Illustrator, and InDesign. The company also offers powerful marketing and analytics solutions, including its Marketo and Adobe Analytics platforms. The company has a strong track record of delivering innovative and impactful solutions that help its customers create and optimize their content and campaigns. The company has a proven business model, with a high customer retention rate and a growing recurring revenue stream. Adobe Inc. (NASDAQ:ADBE) is well-positioned for continued growth, as the global market for creative and marketing software solutions is expected to continue to grow at a healthy clip. The company is also investing in new growth areas such as virtual reality and artificial intelligence. Adobe Inc. (NASDAQ:ADBE) has dipped by over 40% in 2022 as of November 25.
This October, Piper Sandler analyst Brent Bracelin revised his price target on Adobe Inc. (NASDAQ:ADBE) to $345 from $358 and reiterated an Overweight rating on the shares. On November 19, Jefferies analyst Brent Thill revised his price target on Adobe Inc. (NASDAQ:ADBE) to $420 from $440 and maintained a Buy rating on the shares.
At the end of Q3 2022, 93 hedge funds were bullish on Adobe Inc. (NASDAQ:ADBE) and held stakes worth $6.74 billion in the company. Of those, Fisher Asset Management was the most prominent investor in the company and held stakes worth $1.41 billion.
Here is what Aristotle Capital had to say about Adobe Inc. (NASDAQ:ADBE) in its third-quarter 2022 investor letter:
“Adobe Inc. (NASDAQ:ADBE), the content creation and publishing software provider, was the largest detractor for the quarter. So far in 2022, Adobe has achieved record revenues with strength in all its businesses, as the acceleration toward digital has continued to drive content creation across industries. During the quarter, however, the company’s shares declined after announcing its plans to acquire Figma, a web‐first collaborative interface design platform, for $20 billion. What at first glance may seem like a steep price, Figma’s web‐based, multi‐player platform could accelerate the delivery of Adobe’s Creative Cloud technologies on the web, increasing Adobe’s reach and total addressable market. Management expects the deal to close in 2023 and the transaction to be accretive by the end of the third year of integration. As is the case with any significant acquisition, we will take our time to understand this deal’s rationale and follow management’s ability to take Figma to “new heights.” This has been the case with previous acquisitions, including Marketo and Magento (although each at a much smaller purchase price). In general, we admire management teams that are able to recognize the evolving needs of their clients and are unafraid of “competing with themselves” by developing new offerings. We will continue to study this acquisition and better understand the desire of content creators to collaborate over the web.”
