Topic: How To Invest

Stock Pickers Digest Hotline – Friday, December 22, 2017

Article Excerpt

ADOBE SYSTEMS INC., $174.62, symbol ADBE on Nasdaq, makes software that lets computer users create, edit and share documents in the popular PDF format. The company continues to benefit from strong demand for its subscription services, particularly the Creative Cloud package of photo-editing and desktop-publishing programs. In its fiscal 2017 fourth quarter, ended December 1, 2017, Adobe earned $1.26 a share. Those earnings are also up 40.0% from $0.90 a share a year earlier. Revenue jumped 24.8%, to a record $2.01 billion from $1.61 billion. The company continues to move away from the sale of software as a one-time purchase; it now gets 84% of its revenue from recurring sources (subscriptions). Adobe spends a high 17% of its sales on research. That investment helps it compete in a rapidly changing industry. However, the stock trades at a high 31.4 times the $5.57 a share the company will likely earn for fiscal 2018. Moreover, it gets 40% of its revenue from Europe and Asia, and…