At the current market capitalisation of 140 billion USD, I estimate Adobe Inc is undervalued.
I estimate the intrinsic value of Adobe Inc at 270 billion USD.
Many companies like Alphabet Inc (previously Google) and Meta Inc (previously Facebook) strive to become the foundation of internet, so their oligopoly position remains cemented.
Actually, with its imaging software and PDF documents software Adobe is much closer to this goal than Meta, I would say.
This is the big problem with technology companies. Technology is a capital light, easy to scale business and thus any new young technology startup has the chance to disrupt the leaders as Meta, Alphabet, Microsoft etc. That is why most technology companies are trying to build the proverbial moat around their business to quote Warren Buffett.
Adobe, in my personal opinion has built quite a good moat around its business. PDFs are omnipresent, as well as Adobe's imaging software. In addition, the future lies in videos and images which are easier on the eyesight than long text documents.
What is more, with Adobe Creative Cloud, Adobe is on the crest of the cloud computing wave, which is slowly permeating every area of our life.
No comments:
Post a Comment