Options selling with Christian
Growth Investor, Options Selling, Creator of Stock Catalysts
Adobe is completely cooked: its low P/E is low for a reason, and there are plenty of better companies to buy. @StockSavvyShay notes that Anthropic's new Claude Design lets users create prototypes, slides and one-pagers by talking to Claude, pushing into territory associated with Figma and Adobe without requiring much design experience. x.comÂ
Adobe remains the best example of what not to buy because AI has had minimal impact and its backlog is slowing rapidly. Management chose user acquisition over monetization, as Duolingo did, leaving open whether users stay when prices rise; for now, waiting to monetize looks the same as being unable to. Free or cheaper tools that match its specialist subscriptions could cut usage, RPO and cash generation. When acceleration and margin expansion are everywhere, owning neither makes little sense. … Show more
Adobe is hard to want to own after an open-source project reimplemented its full software suite, as @math_fournity reports. x.comÂ
Adobe is a quality company trading at its lowest price-to-earnings multiple in five years. x.comÂ
Claude can replace Adobe for PDF editing in minutes. A custom editor took 15 minutes to build, avoided paying Adobe and had more options; Adobe is done for the long term. x.comÂ
Adobe is not re-accelerating: management guides growth down to 9-10% with operating margins falling, and more pressure lies ahead. That makes buying every dip at about 16x earnings a mistake, even as @qualtrim points to 12% revenue growth and a 47.4% operating margin. x.com x.comÂ
Adobe is a strong company hit harder than it should be, as the market treats a temporary slowdown as permanent decline. It fits the undervalued setup of a real moat, temporary rather than structural problems and extremely negative sentiment, where the price has fallen more than the fundamentals, lowering risk and raising upside. Great companies adapt and recover. x.comÂ
AI design tools from Anthropic are eroding Adobe's terminal value. Per @StockSavvyShay, Anthropic is reportedly preparing a design tool that creates presentations, websites, landing pages and products from natural-language prompts, which helps explain pressure on Figma and Adobe shares. x.comÂ
Adobe could easily go the way of PayPal, its best analog: a mature consumer-facing large-cap tech company that attempted a poorly received large acquisition as growth stalled, then changed executives. Growth is likely to decelerate further amid pricing pressure, buybacks won't matter much in the short term, and more talent will leave once a CEO is picked. The stock is only optically cheap. x.com x.comÂ
Adobe looks undervalued, though less so than Meta, and its buyback adds appeal. As @AdrianGermanKo1 notes, it is cheaper on P/E with very large revenue, discounted because its future story is not viewed as good. x.comÂ
Adobe looks dead because AI can now generate images in 0.6 seconds, undercutting the value case for buying it. The stock is losing its 200-month average, a 20-year average price that only a truly dead name breaks, making it something to avoid. x.comÂ
