GMOTruths

Price Topped Off Last Month. Income Decreasing, Weak Products

Short
NASDAQ:ADBE   Adobe Inc.
ADBE reached all-time highs last month. Net income is waning.

THE GOOD:
The average consumer likes Adobe Photoshop Elements 13, at 79.99.

THE BAD:
They have some real losing products with little future.

Many of the consumer complaints are completely ignored. RAM usage of the most common products such as Flash and Reader has worsened.

Adobe Acrobat was historically favored for technical documentation (manuals) and scientific studies. However, more and more, scientific research is being published in HTML format (PLOSOne, scirp). And so too are user manuals. Acrobat Reader is slow and the plugin slows the browser down. Adobe Acrobat Pro is slow as ever and in less demand due to declining user base.

Adobe Flash is being replaced largely by HTML5 video element. Everybody hates the flash player, including the late Mr. Jobs. It eats a ton of memory, has endless security holes, and requires restarting the browser for each update that comes out, to fix those holes. Flash has been on its way out for a few years for good reason and the replacement is free native HTML5 support.

The creative products, CS3, Photoshop, are priced out of range for the average consumer.

Adobe Dreamweaver usage is rare among professional web developers and is too expensive for the average person. Dreamweaver CC at $20 a month and a one-star rating on Amazon. People don't like it.

Adobe Creative Cloud team lacks technical skill and are still struggling to get a userbase. Users have mixed feelings about the new cloud-based services. The overall market is on edge now and adobe doesn't have it together. They might have it together in a year, if you want to wait it out.

Projected EPS Growth (Next Year vs. This Year) …+57.69% — Really?!

Book value ………………………… 13.62
Price/Book …………………………… 5.51
P/E (Trailing Twelve Months) ………26.92 — 90th in industry.

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