Adobe is Still a Hold

Article Excerpt

ADOBE SYSTEMS INC. $40.20 (Nasdaq symbol ADBE; SI Rating: Average) (408-536- 6000; www.adobe.com; Shares outstanding: 583.3 million; Market cap: $23.5 billion) reported 33.7% higher revenues in the three months ended December 1, 2006, up to $682.2 million from $510.4 million. Ongoing earnings per share rose 6.5%, to $0.33 from $0.31. Adobe holds cash of $2.3 billion or $3.91 a share, and it has no long-term debt. The company has plenty of financing for new product development. Adobe spends a high 21% of sales on research and development. However, it faces competition from freeware versions of some of its software. As well, Adobe’s high p/e of 34 makes it vulnerable to any bad news. Adobe is still a hold. hold…

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