Adobe Systems Incorporated (ADBE) on Track to Reach All-Time Highs

Marketo is projected to lose money in the next two years. It currently trades at 11 times sales. This does not seem too inflated, as nowadays cloud-related companies often get stratospheric valuations. However, the fact that Marketo has never made a penny of profit presents significant risks for investors. The competition is fierce, and the company might find itself in trouble after the initial growth phase. The analysts are modestly optimistic on the stock with a mean price target of $24.83. This is an upside of less than 20% from the current price. The stock is volatile now, and the possible risks are roughly the same.

Bottom line

Adobe is trading near its all-time high, and you can expect it to break it. The company has excellent products, and it has found a new way to capitalize on that. In the coming years, I expect earnings to rise because of the defeat of piracy. It would be harder to use outdated illegal products all over the world. There would be pressure to keep up to date with the technology, so small businesses and individuals in developing countries would be forced to purchase subscriptions. I expect positive synergy between Creative Cloud and Marketing Cloud as well.

Vladimir Zernov has no position in any stocks mentioned. The Motley Fool recommends Adobe Systems (NASDAQ:ADBE). The Motley Fool owns shares of Microsoft.

The article Adobe on Track to Reach All-Time Highs originally appeared on Fool.com and is written by Vladimir Zernov.

Vladimir is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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