Adobe (NASDAQ:ADBE) Shares Down 1.4% – Should You Sell?

Adobe Inc. (NASDAQ:ADBE) shares dropped 1.4% on Tuesday . The company traded as low as $350.58 and last traded at $352.42. Approximately 2,911,052 shares traded hands during mid-day trading, a decline of 27% from the average daily volume of 3,988,011 shares. The stock had previously closed at $357.53.

Adobe News Roundup

Here are the key news stories impacting Adobe this week:

• Positive Sentiment: Adobe announced a partnership with Runway to bring advanced AI video tools for creators and brands — a direct product tie-up that could accelerate adoption of Adobe’s Creative Cloud capabilities and drive revenue expansion in media/creator segments. Adobe and Runway partner to bring advanced AI videos solutions for creators and brands
• Positive Sentiment: Wall Street Zen upgraded Adobe to a “Buy,” signaling some brokers see further upside based on fundamentals and growth trajectory. Adobe (NASDAQ:ADBE) Upgraded by Wall Street Zen to “Buy” Rating
• Positive Sentiment: Several analysts and commentaries frame 2025 as a setup year for stronger AI-driven monetization in 2026 — bullish narrative that supports a longer-term case for multiple expansion if execution continues. Adobe: 2025 Was A Setup
• Neutral Sentiment: BMO Capital kept an Outperform rating but trimmed its price target to $400 from $405, citing competitive pressure in lower-end and AI markets — reflects confidence in Adobe’s fundamentals but acknowledges near-term margin/competitive risks. BMO Stays Outperform on Adobe (ADBE) Despite Competitive AI Pressures
• Neutral Sentiment: Other Wall Street notes show firms trimming price targets while praising record revenue and long-term outlook — mixed signals that could mute short-term upside but support the long-term story. Wall Street Firms Cut Adobe Inc. (ADBE) Price Target but Tout Revenue Growth and Long-term Outlook
• Negative Sentiment: Adobe was hit with a class-action lawsuit alleging improper use of third-party content to train AI models — a legal/regulatory overhang that could increase litigation costs, raise compliance uncertainty, and weigh on near-term investor sentiment. Adobe hit with class action over alleged AI training misuse

Analysts Set New Price Targets

A number of equities analysts recently commented on ADBE shares. Wall Street Zen upgraded Adobe from a “hold” rating to a “buy” rating in a research report on Monday. TD Cowen reduced their price target on Adobe from $420.00 to $400.00 and set a “hold” rating on the stock in a report on Thursday, December 11th. Oppenheimer lowered their price target on shares of Adobe from $460.00 to $430.00 and set an “outperform” rating on the stock in a research report on Thursday, December 11th. Royal Bank Of Canada restated an “outperform” rating and set a $430.00 price objective on shares of Adobe in a research report on Thursday, December 11th. Finally, Morgan Stanley dropped their price target on shares of Adobe from $450.00 to $425.00 and set an “equal weight” rating for the company in a research note on Thursday, December 11th. One investment analyst has rated the stock with a Strong Buy rating, fourteen have assigned a Buy rating, eleven have assigned a Hold rating and three have assigned a Sell rating to the company. According to data from MarketBeat, the stock currently has an average rating of “Hold” and a consensus price target of $417.93.

Adobe Price Performance

The company has a debt-to-equity ratio of 0.53, a quick ratio of 1.02 and a current ratio of 1.00. The stock’s 50-day moving average is $337.10 and its two-hundred day moving average is $354.63. The stock has a market cap of $147.52 billion, a PE ratio of 21.09, a PEG ratio of 1.40 and a beta of 1.54.

Adobe (NASDAQ:ADBE) last released its quarterly earnings results on Wednesday, December 10th. The software company reported $5.50 EPS for the quarter, topping analysts’ consensus estimates of $5.40 by $0.10. Adobe had a return on equity of 61.28% and a net margin of 30.00%.The company had revenue of $6.19 billion for the quarter, compared to analysts’ expectations of $6.11 billion. During the same period in the prior year, the firm earned $4.81 earnings per share. The firm’s revenue was up 10.5% compared to the same quarter last year. Adobe has set its Q1 2026 guidance at 5.850-5.900 EPS and its FY 2026 guidance at 23.300-23.500 EPS. On average, equities analysts predict that Adobe Inc. will post 16.65 earnings per share for the current year.

Insider Buying and Selling

In other Adobe news, CAO Jillian Forusz sold 149 shares of Adobe stock in a transaction dated Friday, October 31st. The stock was sold at an average price of $337.88, for a total value of $50,344.12. Following the completion of the transaction, the chief accounting officer directly owned 3,426 shares of the company’s stock, valued at $1,157,576.88. The trade was a 4.17% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. 0.16% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently made changes to their positions in ADBE. Advisors Management Group Inc. ADV increased its position in shares of Adobe by 1.2% during the third quarter. Advisors Management Group Inc. ADV now owns 15,299 shares of the software company’s stock worth $5,397,000 after acquiring an additional 175 shares during the period. Strategic Investment Advisors MI lifted its stake in Adobe by 6.4% in the third quarter. Strategic Investment Advisors MI now owns 1,669 shares of the software company’s stock worth $589,000 after acquiring an additional 101 shares during the last quarter. Bourne Lent Asset Management Inc. grew its holdings in Adobe by 2.1% during the 3rd quarter. Bourne Lent Asset Management Inc. now owns 57,346 shares of the software company’s stock worth $20,229,000 after acquiring an additional 1,200 shares in the last quarter. Mirabella Financial Services LLP increased its position in shares of Adobe by 102.1% in the 3rd quarter. Mirabella Financial Services LLP now owns 7,594 shares of the software company’s stock valued at $2,675,000 after purchasing an additional 3,836 shares during the last quarter. Finally, Hudson Bay Capital Management LP raised its holdings in shares of Adobe by 195.0% in the 3rd quarter. Hudson Bay Capital Management LP now owns 1,181 shares of the software company’s stock valued at $417,000 after purchasing an additional 2,424 shares in the last quarter. Hedge funds and other institutional investors own 81.79% of the company’s stock.

Adobe Company Profile

Adobe Inc, founded in 1982 by John Warnock and Charles Geschke and headquartered in San Jose, California, is a global software company that develops tools and services for creative professionals, marketers and enterprises. Under the leadership of CEO Shantanu Narayen, who has led the company since 2007, Adobe has evolved from a provider of desktop publishing tools into a cloud-centric provider of digital media and digital experience solutions.

The company’s core offerings are organized around digital media and digital experience.