Adobe: Why It May Be Time To Take Some Profits

• Adobe has exceeded our price targets and the valuation now appears to be a little stretched.
• The higher valuation puts the company at a higher risk for drawdowns if discount rates rise or earnings disappoint even slightly.
• We are not necessarily bearish, and would rate it a hold for buy-and-hold investors. However, for more active investors, it may be time to take some profits.

Adobe (ADBE) is a fantastic company with strong competitive advantages which we covered in our previous articles:
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1. Adobe Stock: Here's Why It Is Undervalued Despite High Valuation Multiples
2. Despite Inflation Fears, Adobe's Valuation Has Increased

​Our first article went into more detail about Adobe's operations and advantages and we recommend having a read if you are unfamiliar with it. Since our first article, Adobe has returned investors 31.78% compared to the S&P 500's return of 13.17%. Since our second article, Adobe has returned 20.90% versus 4.95% from the S&P 500.

​In this article, we will be updating our valuation model for the company since our previous price targets have been exceeded.

*This is a premium seeking alpha article, so we can’t fully post it here.*   ​

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