Adobe stock

Adobe Inc. seems like just the kind of technology stock that would provide shelter in a market storm -- a huge, profitable, decades-old company with strong ...

is not helping either, with analysts opining that the deal seems “ [extremely expensive](/news/terminal/RI99BSDWRGG3).” [Adobe Inc.](/quote/ADBE:US) seems like just the kind of technology stock that would provide shelter in a market storm -- a huge, profitable, decades-old company with strong brands and double-digit revenue growth, selling at the cheapest valuation in almost a decade. [shell out](https://www.bloomberg.com/news/articles/2022-09-15/adobe-agrees-to-buy-figma-in-20-billion-software-deal) $20 billion to buy software company Figma Inc.

Digital media and marketing software firm Adobe posted mixed quarterly results and announced a $20 billion acquisition. ADBE stock fell.

Adobe has been "deinvesting" in a competing product, Adobe XD, for the past 12 to 18 months, Durn said. In the year-earlier period, Adobe earned $3.20 a share on sales of $4.11 billion. The combination of Figma and Adobe assets will lead to a "new era of creative productivity," Chief Financial Officer Dan Durn told IBD. [Find Today's Best Growth Stocks To Watch With IBD 50](https://www.investors.com/research/ibd-50-growth-stocks-to-watch/) [Looking For The Next Big Stock Market Winners? Digital Media accounted for 73% of Adobe's sales in the period. Analysts polled by FactSet expected Adobe earnings of $3.35 a share on sales of $4.44 billion. Thill rates ADBE stock as buy with a price target of 475. For the current quarter, Adobe forecast adjusted earnings of $3.50 a share on sales of $4.52 billion. Figma has positive operating cash flows and gross margins of about 90%, according to a The San Jose, Calif.-based company earned an adjusted $3.40 a share on sales of $4.43 billion in the quarter ended Sept. On a year-over-year basis, Adobe earnings rose 9% while sales increased 13%. It also announced a deal to acquire Figma, a web-first collaborative design platform, for about $20 billion.

In a surprise move, Adobe Systems (ADBE) before the open announced a sizable acquisition, agreeing to acquire Figma for $20 billion.

But by and large, Adobe stock is in a downtrend at the moment. For the fourth quarter, management expects $3.50 a share in profit on revenue of $4.52 billion vs. [As for the first bit of news](https://www.thestreet.com/markets/adobe-stock-slumps-on-20-figma-purchase-soft-q4-sales-forecast), the company plans to acquire the collaborative design platform for $20 billion in a half-cash, half-stock deal. And unless Adobe stock puts together some sort of enormous rebound, today’s action is quite discouraging for the longs. As the weekly chart above shows, Adobe stock is breaking below longtime uptrend support (blue line). [ADBE](https://www.thestreet.com/quote/ADBE)) before the open announced a sizable acquisition, agreeing to acquire Figma for $20 billion.

Software company Adobe Systems (ADBE) is lower after reporting earnings and the $20 billion acquisition of Figma.

Options activity is ramping up in response to all the news. The September 375 call is the most popular, while new positions are being opened at the 300 put from the same standard series set to expire tomorrow. The software company reported adjusted third-quarter earnings of $3.40 per share on revenue of $4.43 billion, the former of which topped expectations and the latter matching estimates.

Adobe (NASDAQ:ADBE) turned in its earnings report earlier today, and the news was hardly good. Analysts expected Adobe to post earnings per share of $3.35.

There is a path to victory here, but it requires a lot of circumstances to precisely line up and produce a positive outcome. The rise of “return to the office” movements will limit the value of remote-ready collaborative tools. The mixed earnings report, the disappointing future projections going into a period of relatively high demand, and a massive expense laid out for a product of dubious value doesn’t exactly bode well. Just to top it off, it’s a brand new collaborative creativity tool launching into some of the worst macroeconomic conditions we’ve seen since 2008. That’s the highest level of “neutral,” which suggests a somewhat better than even chance Adobe will ultimately do better than the broader market. [Adobe announced plans to proceed with the acquisition of Figma](/news/adobe-nasdaqadbe-close-to-snap-up-figma-for-15b), a collaborative design platform. Picking up Figma, according to a Thursday press release, will “…usher in a new era of collaborative creativity.”. A series of ups and downs followed, ultimately bringing Adobe shares down to around the low $300 per share level. Adobe currently has a Smart Score of 7 out of 10 on TipRanks. While there haven’t been many informative buys or informative sells of late, the aggregate offers a worthwhile perspective. That’s a loss of over half its value in the space of a year. [Analysts expected Adobe to post earnings per share of $3.35](/stocks/adbe/earnings).