ADBE Stock Prediction: Why Adobe Deserves A Price Target Of $350

motek 1This ADBE stock prediction article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.


  • The average 12-month price target for Adobe’s stock is only $317.42.
  • I am more optimistic on Adobe. I have a price target of $350 for its stock. Adobe’s Sensei Artificial Intelligence platform is reinvigorating the global creative industry.
  • Content is king especially now that most people are internet-dependent. Consequently, Adobe Sensei helping creative professionals produce content faster makes Adobe a worthy investment.
  • Creative Cloud subscription fees is Adobe’s biggest revenue and net income generator.
  • More customers will rely on Creative Cloud software programs now that they come with Artificial Intelligence features.

I was employed for almost two decades the advertising/creative industry. I am therefore highly confident that Adobe (ADBE) deserves a 12-month price target of $350. My PT is notably higher than the average PT of $317.42 at TipRanks. My greater optimism over Adobe is largely due to its expanding implementation of Sensei-enabled features on its software products.

ADBE Stock Prediction
(Source: TipRanks)

Going forward, the already robust $1.65 billion quarterly revenue from Creative Cloud can grow to $2 billion by 2022. The logic behind this is that Sensei-enabled features on Creative Cloud software programs will attract more paying customers.

Creative Cloud Will Fly Higher and Higher

Based on the chart below, Creative Cloud subscription fees remain Adobe’s biggest sales generator. Enabling Artificial Intelligence-enhanced content creation and designing will inspire more people to start a career in creative/advertising industry.  The more people that joins the creative industry, the better it is for Adobe’s software subscription business.

Two years from now, it is reasonable to guesstimate that Adobe will be earning $8 billion in annual sales from Creative Cloud subscription fees. Renting software to creative professionals is a high-margin endeavor. The almost zero-competition against Creative Cloud is helping Adobe enjoy a gross margin of more than 85.16%  and net income margin of 26.10%.

ADBE Stock Prediction
(Source: Seeking Alpha)

A stronger AI-enabled Creative Cloud software-as-a-service business can help Adobe increase its earnings per share to beyond $10. Using a 35x P/E valuation ratio basis, a $10 annual from Adobe should push ADBE’s stock price to $350. Since there is little to none competition against Adobe Creative Cloud, it is still reasonable to use 35x P/E. In my book, a company with a monopoly always deserves higher valuation ratios.

Adobe’s monopoly on creative/design software is only growing stronger because of Adobe Sensei.

Why Sensei AI Is Important To Adobe’s Future Valuation

Sensei is helping companies and creative professionals by letting Artificial Intelligence do most of the tedious tasks involved in content creation and design. Eliminating or reducing the mundane in design and content creation results in workflow acceleration. A faster production rate of designs and content leads to better profitability. Adobe’s future is brighter when its software subscribers are becoming more prosperous.

A survey of graphic artists and content creators/editors showed 74% of them agree that 50% or more of their daily tasks are of the uncreative or repetitive nature.

(Source: Pfeiffer Report)

You know Adobe is a great long-term investment when 58% of surveyed professionals believe Adobe Sensei can make them extremely more efficient and productive. Remember that creative professionals are highly-paid freelancers or employees.

It is a strong buy recommendation for Adobe’s stock when majority of creative professionals are falling in love with Sensei AI. Adobe’s AI can reduce the day-to-day drudgery, which should emancipate graphic artists and designers to spend more time on real creative thinking.

I see Adobe Sensei as an AI assistant that will help people come up faster with more variations in designs. By coming up with more mockups or design proposals, clients get more choices for their design needs. Advertising veterans know that difficult clients requiring more selections from submitted mock-ups often delay workflows.

Adobe Sensei can also become in-app tutors that can teach creative professionals new features and a better application of fundamental design principles. Helping creative professionals produce work faster (with correctly applied design fundamentals) also shortens the overall workflow.


Adobe’s stock deserves a $350 price target. Sensei AI is fortifying Adobe’s monopoly on creative/design software products. Better profitability comes from further enhancing your monopoly. A more profitable Adobe will consequently lead to higher valuation ratios.

Let us also remember that Adobe has a decent balance sheet. It touts $3.65 billion in cash & short-term investments. Adobe can easily allocate more budget to Research & Development. A bigger R&D budget could lead to more Sensei AI-based features for Creative Cloud software products.

(Source: Seeking Alpha)

My buy rating for Adobe’s stock is also based on its super bullish one-year algorithmic market trend score of 397.36. The stock-picking AI of I Know First truly appreciates the enviable monopoly grip of Adobe on creative/design software products.

How to interpret this diagram.

Past Success With ADBE Stock Prediction

I Know First has been bullish on ADBE’s shares in past forecasts. On April 7, 2019, the I Know First algorithm issued a bullish forecast for Adobe. The algorithm successfully forecasted the movement of the Adobe’s shares on the 3 months time horizon. ADBE’s shares rose by 13.66% in line with the I Know First algorithm’s forecast. See chart below.

This bullish ADBE stock prediction was sent to the current I Know First subscribers on April 7, 2019.

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Please note-for trading decisions use the most recent forecast.