Why Has Adobe’s Stock Price Increased By Over 30% In The Last Five Months?
Adobe’s (NASDAQ: ADBE) stock has moved up by over 34% in the last five months, outperforming the markets by 20%. The primary reason for this has been the improved guidance by the company. Furthermore, the company continues to add subscribers for its Creative Cloud (CC) at a fast clip, and its marketing cloud revenue is growing fast as well. In many instances, such dramatic stock price appreciation creates a seemingly expensive stock and the P/E ratio is in fact a lofty 47.4 x. That said, earnings growth is even stronger. As a result, the Price-To-Earnings Growth (PEG) ratio—a valuation metric that is derived by dividing the earnings growth rate of a company into its P/E ratio—is a low 1.19x. The key highlights for this situation are as follows:
Have more questions about Adobe? See the links below.
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