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Is Adobe’s future linked to stock climbing to record high?

Adobe Inc. (NASDAQ: ADBE) stock soared to a record high of $309.32 on Wednesday as the software solutions provider will be benefited by the continued growth in Digital Media and Digital Experience. Investors believe that Digital Media remained the company’s current business growth opportunity while Digital Experience could be the future of Adobe.

As part of the Digital Media strategy, the company expects Creative Cloud to drive sustained long-term revenue growth through the continued expansion of its customer base by acquiring new users in North America and international markets.

Adobe plans to build out a data-driven operating model to market the benefits of its Document Cloud solutions, combined with the low entry point of subscription-based pricing. The company intends to continue promoting the capabilities of its cloud-based document solutions and Adobe Sensei features to Acrobat and Acrobat Reader users.

Is Adobe's future linked to stock climbing to record high
CREDIT: Adobe Systems

The company will continue to engage in strategic partnerships to help drive the enterprise business, including its partnership with Microsoft (NASDAQ: MSFT). Adobe has made significant investments to broaden the scale and size of routes to the market and believes these investments will result in continued growth in revenue in its Digital Experience segment in fiscal 2019 and beyond.

In the recently completed second-quarter, Adobe has a total debt of $4.13 billion with $3.15 billion remained the current portion and the long term debt stood at $988 million. In contrast, the company has sufficient cash and short-term investments of $3.47 billion.

It is expected that the total liabilities of $9.7 billion don’t pose much threat given the company’s immense market cap of $148.82 billion. The total debt-to-equity ratio is at 0.42 and this means the company is not aggressive in financing its growth with debt. But, Adobe could be beneficial by the higher return on equity that comes with the use of debt despite the risky part.

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The competition with rivals remained positive for Adobe, whose capabilities remained unmatched by any company’s offerings. Major competitors included Apple (NASDAQ: AAPL), Autodesk (NASDAQ: ADSK), Avid Technology (NASDAQ: AVID), Microsoft, Alphabet (NASDAQ: GOOGL), Facebook (NASDAQ: FB), IBM (NYSE: IBM), Oracle (NYSE: ORCL), and others.

Shares of Adobe opened higher on Wednesday and is trading in the green territory on the Nasdaq. The stock has risen over 22% in the past year and over 13% in the past three months. The 50-day moving average stood at $284.47 while the 200-day moving average remained at $265.16.

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