Adobe Stock Has Been Under Pressure. Here’s What Could Spark a Turnaround
Adobe keeps beating earnings estimates while the stock keeps sliding, and that contradiction has split Wall Street into two very different camps with very different price targets.
The 24/7 Wall St. price target for Adobe (NASDAQ:ADBE | ADBE Price Prediction) is $298.13 over the next 12 months. That means 16.4% upside from the current $256.13. The stock earns a buy rating with high confidence.
| Metric | Value |
|---|---|
| Current Price | $256.13 |
| Price Target from 24/7 Wall St. | $298.13 |
| Upside/Downside | 16.4% |
| Recommendation | BUY |
| Confidence Level | 90% |
Adobe keeps beating estimates while the stock keeps falling, and that gap defines the valuation debate. Shares trade at a forward P/E of 9, which looks cheap for a business that just raised guidance.
Several turnaround catalysts are already on the calendar: a new CEO takes over December 1, Adobe MAX arrives in November, and AI-first ARR is growing more than 150%.
Record Quarters Have Not Stopped the Slide
Adobe is down 26.75% year to date and sits well below its 52-week high of $363.70, though it has climbed off the $190.12 low. Momentum has turned recently, with shares up 8.51% over the past week and 3% over the past month.
In fiscal Q3, revenue came in at $6.76 billion, up 12.9% and ahead of the $6.70 billion consensus. Non-GAAP EPS of $6.13 topped the $6.09 estimate, making it the fifth beat in a row.
Jim Cramer summed up the problem in June: the stock traded at “just 8.5 times” earnings as concerns grew that AI will replace software.
Why Bulls See $328 and Beyond
Adobe now has more than 1 billion monthly active users, and Firefly ending ARR grew 40% quarter over quarter. The pending Topaz Labs deal adds AI video enhancement.
Buybacks also help, with about $24.55 billion left on the current authorization. Incoming CEO Anil Chakravarthy sees “a massive opportunity for us to be the agentic software leader.” In our bull case, shares reach $328.71.
What Could Keep Adobe Stuck
Investors remain wary. Of the analysts covering Adobe, 23 rate it a hold, and the consensus target is $272.31. Analysts on the Q3 call noted that net new ARR fell 36% to 37%. Management’s explanation is that it deliberately sent users into the freemium model and delayed price increases.
The trade-off is reasonable, but it needs to start showing up as revenue. A CFO exit and the CEO transition add execution risk. In our bear case, the stock sits flat at $256.44.
Adobe Trades at Half the Multiple of Microsoft and Salesforce
Microsoft (NASDAQ:MSFT) competes with Acrobat and Express through Copilot. Shares trade at 30 times earnings, supported by 43% Azure growth.
Salesforce (NYSE:CRM) competes with Adobe’s Experience Cloud and is growing more slowly, yet it still trades at 27 times earnings.
| Company | P/E (TTM) | Latest Quarterly Revenue Growth |
|---|---|---|
| Adobe | 14 | 12.9% |
| Microsoft | 30 | 17.75% |
| Salesforce | 27 | 10.83% |
Even at our target, Adobe would trade at about 11 times forward earnings. Compared with these peers, the 24/7 Wall St. price target looks conservative.
Discount Outweighs Doubt
The 24/7 Wall St. price target of $298.13 comes with a buy rating and high confidence.
Valuation is the key factor: double-digit growth at a single-digit forward multiple. The case gets stronger if MAX and the CEO transition show freemium users turning into paying ARR. It weakens if net new ARR keeps contracting into 2027.
| Year | Price Target from 24/7 Wall St. |
|---|---|
| 2026 | $264.13 |
| 2027 | $298.13 |
| 2028 | $333.05 |
| 2029 | $370.90 |
| 2030 | $388.35 |
Adobe is expected to keep executing on its current strategy. Faster AI monetization could push the stock higher, while AI tools from competitors could cut into these numbers.
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