ADBE anyone? via /r/wallstreetbets #stocks #wallstreetbets #investing


ADBE anyone?

Provided the whole mess in the Ukraine doesn’t evolve into WW3, what do you guys think about ADBE?

Technically. stock lost around 37% since earnings at ATH in November. RSI is now at 26 and stock price way below 52 week MA, hugging lower band. Looks to me like we’re approaching a potential floor with a combination of the stock being oversold anyway and the recent tech/Ukraine dip amplifying this.

Fundamentally, we have earnings upcoming in March and the company looks healthy and profitable with gross margin at around 30% and most revenue from subscriptions of industry leading applications like photoshop, illustrator, after effects etc. This means the company doesn’t have to constantly put out new products but only needs to keep their customers who would face enormous opportunity cost from learning new software should they want to switch. Also, ADBE product are, as said, industry standard, so why would they even want to switch?

Last earnings met estimates but 2022 outlook wasn’t as expected, so the stock took a downturn but this should be priced in now, so meeting or exceeding current estimates should give the stock a decent upside potential.

I currently don’t hold any position but I’m considering opening a spread to play earnings or pre-earning- IV increase.

Bear cases?

– WW3 kills us all.

– Tech continues to get crushed and the industry that ADBE serves goes into regression leading to lack of demand and general tech-recession.

– Q4 performance was even worse than expected and we explore even lower lows

What do you think?

Submitted February 24, 2022 at 03:45PM by Rangorsen
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