Adobe Trades at 10 Times Next Year's Earnings. Is It Finally Time to Buy the Stock?
A multiple this low usually means the market smells decline -- yet the latest quarter set records.
Overview
Adobe (NASDAQ: ADBE) trades at $264.02 as of this writing, about 29% below its 52-week high of $370.86. After that slide, the stock costs about 15 times the earnings it reported over the past year. It costs about 11 times the non-GAAP (adjusted) earnings management expects for the current fiscal year, and roughly 10 times what analysts project for the year after that.
Multiples like these are what the market typically assigns to businesses whose profits have stopped growing, or are about to. Adobe grew revenue 13% last quarter, to a record. In other words, the price and the results disagree.
Details
Is the creative software giant a business in decline, or one of the cheaper growth stocks in the market?
Source
Originally published at www.fool.com.