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Adobe (NASDAQ: ADBE) delivered fiscal third-quarter revenue of $6.76 billion, a 13% year-over-year gain that cleared the company's own forecast range of $6.67 billion to $6.72 billion, and lifted its full-year outlook across every major metric.
The complication is a 39% year-over-year decline in new annual recurring revenue, which signals that the growth engine is running on existing subscribers while the top of the funnel thins.
The case for the stock starts with valuation.
At a forward price-to-earnings ratio of 9 times fiscal year 2027 analyst estimates (ending November 2027), Adobe is priced like a company in structural decline, not one compounding revenue at double digits with high gross margins.
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