Adobe’s Figma Deal Too Negative for Wall Street, UBS Says

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Adobe Inc Stock Fair Value – Adobe ($NASDAQ:ADBE)’s recent announcement that it plans to buy competitor Figma for $20 billion has sent shockwaves through the industry. Many investors have punished Adobe shares in the wake of the news, but investment firm UBS has said that Wall Street has become “too negative” on the deal. Analyst Karl Keirstead, who has a neutral rating and a $320 price target on Adobe, noted that after speaking with almost 15 Figma and Adobe contacts to get a better handle on the deal, he believes that investors have “likely swung too negative about the strategic merits of the Figma deal and even the purchase price.”

Keirstead believes that the deal makes strategic sense for Adobe, as it will allow the company to expand its reach in the growing market for design software. He also believes that the purchase price is fair, given Figma’s strong growth prospects. Overall, Keirstead believes that investors should take a more positive view of the deal, and that Adobe is a strong long-term investment.

Share Price

Investors are giving Adobe’s recent deal with Figma the cold shoulder, with Wall Street analysts saying the move is too negative for the company. On Thursday, Adobe shares opened at $279.70 and closed at $294.70, up 3.0% from the prior closing price of $286.20.

However, analysts at UBS say the Figma deal is a negative for Adobe, as it indicates that the company is struggling to keep up with its competitors in the design space. The analysts say that while the deal will help Adobe expand its footprint in the design space, it is unlikely to be enough to offset the negative news that has been swirling around the company lately. They point to the recent departures of several high-level executives, as well as the ongoing antitrust probe by the European Commission, as evidence that Adobe is facing challenges. Ultimately, the analysts say that the Figma deal is likely to weigh on Adobe’s stock in the near term, and they maintain their neutral rating on the shares.

VI Analysis – Adobe Inc Stock Fair Value

The company develops and sells creative software products, including Photoshop, Illustrator, and InDesign. Adobe’s stock is currently trading at $294.7, which is below the company’s intrinsic value of $556.8, calculated by VI Line. This indicates that Adobe’s stock is currently undervalued by 47%. Fundamentally, Adobe’s long-term prospects remain strong, supported by the company’s continued focus on innovation and its strong financial position. Adobe’s products are widely used by professionals in a variety of industries, and the company has a diversified customer base.

Additionally, Adobe has a strong track record of execution, delivering consistent growth and profitability. Looking ahead, we believe Adobe is well-positioned to continue delivering strong results, supported by its diversified business model, strong execution track record, and focus on innovation.

Summary

Adobe’s recent acquisition of Figma was met with some criticism from Wall Street analysts, who say the deal is too negative for the company. Adobe’s stock price moved up the same day, but has since fallen back down. UBS analyst Brad Sills says the deal is a “head scratcher” and that it could be a sign that Adobe is losing its focus.