"The average user does no longer need Adobe subscriptions. And what's actually happening is that a lot of video production and video editing is starting to require less and less as well."
"Patel's argument is structural, not cyclical. The cost of editing video and image is much lower than it was even two years ago, and he called that a real long-term value impact."
"Adobe trades at a forward P/E of roughly 10x, historically cheap for a software franchise of this quality."
Adobe faces challenges as users reconsider the need for subscriptions due to lower video editing costs and competition from free tools. Dylan Patel, CEO of SemiAnalysis, emphasizes that while Adobe has a strong market position, the demand for traditional video editing is decreasing. Despite solid revenue growth and earnings, Adobe's stock has dropped significantly. The rise of alternatives like Canva and the shift in user preferences indicate a structural change in the market that could impact Adobe's long-term value.
Read at 24/7 Wall St.
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