There is no shortage of tumult and severe fortune reversals in the tech world, yet Adobe Systems Incorporated (NASDAQ:ADBE) has been able to weather myriad industry and economic storms. Celebrating its 34th year in business this December—a Methuselah-worthy feat in the digital world—Adobe stock has been able to stay ahead of the curve with a steady skein of production introductions and upgrades, and an uncanny ability to roll with whatever punches may come its way.
Is Adobe Stock a Flash in a Pan?
Indeed, ADBE stock has been weathering a series of significant punches lately, as major online entities as its one-time flagship product “Flash” was abandoned by the online titans. Last month, Mozilla announced that its “Firefox” Web browser would stop supporting “certain Flash content…not essential to the user experience.” This followed a May announcement that Google would stop supporting Flash for its “Chrome” Web browser and jettison all Flash advertisements by the beginning of next year. Facebook and YouTube switched their respective default video players from Flash to HTML last year. (Source: “Mozilla Firefox latest to move away from Adobe Flash,” The Star Online, August 5, 2016.)
However, none of this should be considered surprising: Flash’s days were numbered when Apple would not support Adobe’s product on its first “iPhone” in 2007. Adobe also took a considerable gamble when it opted in 2011 not to push Flash for mobile devices. However, the company did quickly change with the times, announcing last year that it would also focus on the HTML5 coding language that has become the preferred standard for digital multimedia presentations.
Adobe is no one’s idea of a one-trick company. This summer, it has been busy with product unveilings. Last month, it launched “Lightroom” for “Apple TV,” which offers photographers a user-friendly way for displaying edited photographs on home entertainment big screens. (Source: “Adobe launches Lightroom for Apple,” The Verge, July 26, 2016.)
Adobe also integrated its “FrameMaker” technical document authoring tool with its “Experience Manager” content management solution to create a less complicated solution for customers building web sites, apps, and forms for delivery across multiple formats and devices.
Loni Stark, senior director of strategy and product marketing at Adobe for the Experience Manager business, acknowledged this new development affirmed Adobe’s long-haul commitment to mobile technology: “The mobile publishing trend in 2016 jumped to 70% of companies looking at making sure that technical communication is available through mobile apps and mobile devices because that’s the way people want to consume it.” (Source: “Adobe Integrates FrameMaker, Experience Manager,” eWeek, July 25, 2016.)
While the company stays on top of tech developments, it is also cognizant of sociopolitical issues. On July 26, Adobe casually acknowledged that an internal review determined that its female employees, on average, earned $0.99 for every $1.00 earned by their male counterparts across the U.S., adding there was no evidence of a wage gap between white and nonwhite workers in the U.S. (Source: “Technology Stocks Worth Chasing: Adobe Systems Incorporated (ADBE), Oclaro, Inc. (OCLR),” Zergwatch.com, August 3, 2016.)
Why Adobe Stock Remains Solid
Adobe reported $0.71 earnings per share (EPS) for its last quarter, up from $0.48 in the year-earlier period, with revenue of $1.39 million for the quarter, up 20.4% year-over-year. Not surprisingly, most market experts view the ADBE ticker as synonymous with a sure bet: Lathrop Investment Management Corp. picked up 710 additional shares in Adobe stock in the last quarter end, which brings its total to 140,566 shares, or 4.11% of its portfolio; Suvretta Capital Management LLC boosted its stake in Adobe during the first quarter by 88.6%, bringing its total to 1,857,595 shares—roughly 6.6% of its portfolio; and Zacks Investment Research recently rewarded Adobe stock with a performance rank of No. 1, its “Strong Buy” ranking.
Of course, you can’t please everyone. Investment firm Capital Analysts sold all of its ADBE stock in the last quarter, albeit a relatively meager 138 shares valued at $13,495.
Nonetheless, Adobe continues to fascinate investors, with Pacific Crest Securities going so far as to openly speculate that the company might be eyeballing an acquisition of the e-commerce software firm Shopify. (Source: “Shopify Stock Rises On Q2 Beat; Apple Pay Support Set,” Investor’s Business Daily, August 3, 2016.)
The Takeaway on Adobe Stock
The vibrancy of Adobe stock shows no signs of abating, as the company easily maintains its position as a leader in the digital world. In today’s market, adding a pick like ADBE stock to a portfolio is the closest thing to a no-brainer.