Is Adobe an Outperform?

With shares of Adobe Systems Inc. (NASDAQ:ADBE) trading at around $38.61, is ADBE an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Adobe is now releasing Reflow for the first time. This is a new responsive design tool that is built on HTML and JavaScript. It’s a web-based design service that allows you to resize your screen. Preview one is now available to free and paid subscribers. If you would like a more detailed yet simple explanation, you can watch this short video.

Looking at Adobe away from Reflow, there have been mixed results. Revenue growth, EPS growth, and operating margins are all above industry averages. However, ROE is below the industry average.

The customer base hasn’t been growing at the same pace as it has in the past, but Adobe’s new cloud-based approach should reignite growth.

Let’s take a look at some important numbers prior to forming an opinion on the stock…