Adobe (ADBE) Stock Forecast & Price Target

Adobe’s strong financial performance is reflected in its first-quarter results, where total revenue reached $5.71 billion, an increase of 10% year-over-year, surpassing both consensus estimates and internal projections. The company also reported robust growth in its Digital Media segment, generating $4.23 billion, an 11% increase compared to the previous year, further indicating positive trends in subscription revenue for both Business Professionals and Consumers, and Creative and Marketing Professionals groups. Additionally, Adobe's guidance for fiscal year 2025 reinforces confidence, projecting total revenue growth of 9% year-over-year alongside steady momentum in its Digital Experience segment, establishing a solid foundation for continued growth.

Adobe's stock outlook is negatively influenced by a flat full-year operating margin expectation of 46%, with guidance indicating a decline to 45% for the second quarter of fiscal 2025. Additionally, the company experienced a sequential decline in total RPO of $270 million, contributing to a decrease in total bookings by 2.0%, with a more pronounced sequential drop of 26.8%. Competitive pressures within the Digital Media space and concerns regarding a potential economic downturn are amplifying risks, as the company has reported slower growth rates compared to its large-cap technology peers.