Seeking Alpha
Research analyst, long/short equity, tech
Profile| Send Message|
( followers)  

Trefis members have created forecasts for two key drivers of Adobe’s (NASDAQ:ADBE) stock over the last week: (1) Adobe Creative Software Pricing and (2) Adobe Creative Software Market Share. Their forecasts suggest that Adobe’s Creative Software Pricing and Market Share will trend slightly lower than the Trefis forecast. These projections suggest a combined downside of about 2-3% for Adobe’s stock.

Photoshop and Other Creative Software is the most valuable division for Adobe, constituting around 54% of the Trefis price estimate of $38 for Adobe’s stock. Photoshop, Dreamweaver, Flash Professional, and InDesign are few of the popular creative software products offered by Adobe. Some of the competing software suites include Corel Corp’s (CREL) CorelDRAW, Quark’s QuarkXpress, and Apple’s (NASDAQ:AAPL) Aperture.

Considering the importance of creative software, Adobe’s stock is quite sensitive to (1) Adobe Creative Software Pricing and (2) Adobe Creative Software Market Share. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

1. Adobe Creative Software Pricing

The average of forecasts for Adobe Creative Software Pricing created by Trefis members indicated a projected increase from $763 in 2010 to $1,045 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from $787 in 2010 to $1,095 by the end of the Trefis forecast period. The member estimates imply a downside of 2% to the Trefis price estimate for Adobe’s stock. In the past, average Adobe Creative Software Pricing has increased from $384 in 2005 to $729 in 2009.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of Adobe’s stock to Adobe Creative Software Pricing.

Our complete analysis for Adobe Creative Software Pricing is here.

2. Adobe Creative Software Market Share

The average of forecasts for Adobe Creative Software Market Share created by Trefis members indicated a projected decrease from 46% in 2010 to 43% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of a decrease from 46% in 2010 to 44% by the end of the Trefis forecast period. The member estimates imply a downside of 1% to the Trefis price estimate for Adobe’s stock. In the past, Adobe Creative Software Market Share has decreased from 48% in 2005 to 43% in 2009.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of Adobe’s stock to Adobe Creative Software Market Share.

Disclosure: No positions

Source: Rising Competition Could Erode Adobe’s Creative Software Pricing and Share