Adobe Inc. (NASDAQ: ADBE) has been one of the market’s bigger underperformers. After a steep decline, the stock now trades near $355/share, down more than 30% in the past year. Slower growth in its creative software business, questions around AI monetization, and a valuation reset have weighed on performance. Still, with margins near 90% and strong cash flow generation, Adobe remains highly profitable and continues to attract investor attention.
Recently, Adobe has leaned heavily into AI to reshape its business. The company expanded its $20B share repurchase program and rolled out new features in Firefly and its Agentforce platform, designed to embed generative AI across Photoshop, Illustrator, and enterprise workflows. These moves suggest Adobe is balancing shareholder returns with a push to stay competitive in the fast-moving AI race.
This article explores where Wall Street analysts think Adobe could trade by 2027. We have pulled together consensus targets, growth forecasts, and valuation models to outline the stock’s potential trajectory. These figures reflect current analyst expectations and are not TIKR’s own predictions.
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Analyst Price Targets Suggest Moderate Upside
Adobe trades at about $355/share today. The average analyst price target is $454/share, which points to around 26% upside. Forecasts show a wide spread and reflect divided sentiment:
- High estimate: ~$605/share
- Low estimate: ~$280/share
- Median target: ~$460/share
- Ratings: mostly Buys, some Holds, a few Sells
It looks like analysts see meaningful upside for Adobe stock today:
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Adobe: Growth Outlook and Valuation
The company’s fundamentals still appear steady:
- Revenue may grow ~9–10% annually through 2027
- Operating margins sit around 46%
- Shares trade at ~16x forward earnings, well below the 5-year average of ~30x
- Based on analysts’ average estimates, TIKR’s Guided Valuation Model suggests ~$462/share by 2027
- That implies ~28% upside, or about 12% annualized returns
These numbers suggest Adobe can keep compounding at a steadier pace than in the past. For investors, the valuation looks more reasonable than before, which may help limit downside risk, but stronger returns likely depend on Adobe holding margins and proving its AI initiatives can drive growth.
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What’s Driving the Optimism?
Adobe continues to benefit from its dominance in creative software, even as growth has slowed. Its push to integrate AI into Photoshop, Illustrator, and the new Agentforce platform could unlock new revenue streams and reinforce its market leadership. These AI tools are still early, but they may help expand the customer base and make Adobe’s products more essential for creators and enterprises.
In addition, Adobe’s financial strength remains a key advantage:
- Operating margins near 46%
- Gross margins close to 90%
- $20B share repurchase program underway
- Strong free cash flow supporting AI investments and shareholder returns
These factors help explain why many analysts remain optimistic. For investors, the bull case is that Adobe’s AI adoption, coupled with its scale and profitability, may support steady compounding even in a competitive landscape.
Bear Case: Slower Growth and Rising Competition
Despite its strengths, Adobe’s growth trajectory has clearly cooled. Revenue growth has slowed from ~18% annually over the past decade to single digits today. Competition is also heating up, with AI-native platforms offering lower-cost alternatives and threatening to chip away at Adobe’s pricing power.
Other risks include:
- Potential pricing pressure on core creative tools from generative AI
- Slower adoption in mature markets where growth may already be saturated
- A re-rating risk if margins slip or AI investments fail to deliver expected returns
For investors, the concern is that Adobe’s valuation already assumes stable execution. If growth continues to lag or competition erodes market share, the stock may struggle to meet even current forecasts.
Outlook for 2027: What Could Adobe Be Worth?
Based on analysts’ average estimates, TIKR’s Guided Valuation Model suggests Adobe could trade near ~$462/share by 2027. That would represent about a 28% gain from today’s level, or roughly 12% annualized returns. The outcome assumes mid-single-digit revenue growth and stable operating margins in the mid-40s.
While this would represent solid performance, it already bakes in a fair amount of optimism. To deliver stronger upside, Adobe may need faster AI monetization, stronger international adoption, or margin gains above expectations. Without that, returns could look steady but not spectacular.
For investors, Adobe still appears to be a high-quality, cash-rich company, but outsized returns likely depend on the success of its AI strategy.
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