ADBE - Adobe Inc.

Listed among 18 stocks near intrinsic value with potential for 9%+ returns over 10 years. Paul already owns this stock.

Charlie calls Adobe a deep value buy, trading at 10x free cash flow versus its 10-year average of 25x. It generates nearly $10B in free cash flow annually with elite 41% FCF margins. The company is in the middle of a $25B buyback through 2030. He believes the selloff is overdone and expectations are so low that Adobe should easily beat earnings.

Bought for the same low-capex reasoning as MSCI and Fortinet. Part of the portfolio shift toward capital-light businesses.

Up 7% on Friday. Still way off all-time highs. Gareth sees upside to $300 (20-25% more upside). AI may take some business but the stock got overcrushed and there's potential for AI to be used to their advantage.

Host cites Adobe as a better alternative: growing 10-12% per year with 6% annual buybacks and no plans for big acquisitions or dilution. He invests in software companies down a lot like Adobe.

Upcoming earnings on June 11th are critical. Stock is 'stupid cheap' with forward PE of 10, buying back 6% of shares annually. Needs to show revenue reacceleration above 12-13% to prove new monetization is working. Bullish but waiting for confirmation.

Adobe is successfully transitioning from seat-based to credit-based pricing using shrinkflation — reducing credits per dollar at each tier. This new monetization system is expected to accelerate as AI usage grows. The host is a current investor in Adobe and prefers it over Salesforce and Service Now. He believes credit-based pricing could be more profitable than subscriptions in an AI agent world.

Brown expresses uncertainty about Adobe's ability to compete in the future due to AI advancements.

Used as a historical case study. Adobe transitioned to subscription model in early 2010s, stock initially dumped, but went on to 10x+ over the next 8 years. Cited as evidence that SaaS model transitions create buying opportunities.

Burry increased his existing Adobe position despite the stock falling significantly from its all-time high of $700 to $255. The host finds similar potential returns as PayPal in his stock analyzer, with a middle price estimate of $400-$550. He notes the company is still growing well even if not at previous rates.