Activist Jeffrey Ubben Continues Reducing His Stake In Adobe Systems Incorporated (ADBE); Is The Upside Gone?

Without further ado, we will take a look at Adobe’s recent financial results so as to understand the extent to which the success of the transition to a subscription model is reflected in its performance. Adobe reported a record quarterly revenue of $1.16 billion for its second fiscal quarter of 2015 that ended May 29, compared to a revenue figure of $1.07 billion reported in the same quarter a year ago. This is the first sign that the company has indeed been doing very well lately. Adobe’s Digital Media segment generated revenues of $747.48 million in the second fiscal quarter of this year, compared to $691.58 million reported in the second quarter of 2014. At the same time, the company’s Digital Marketing segment also generated higher revenues year-over-year, reaching a revenue figure of $366.46 million for the second quarter of 2015, compared to $330.36 million posted a year ago. Finally, Adobe’s diluted earnings per share was $0.29 on a GAAP-basis for the second fiscal quarter of this year, compared to $0.17 for the same quarter in 2014.

Even though Adobe has been doing great recently, with its shares increasing by nearly 13% year-to-date, one should not overlook the fact that Jeffrey Ubben has been gradually reducing his stake in the company. It might be the case that the company’s positive outlook has already been priced in, so there is not much upside potential for the company remaining. Only time will tell. Meanwhile, Stephen Mandel’s Lone Pine Capital is the second-largest shareholder of Adobe Systems Incorporated (NASDAQ:ADBE) within our database, tailing only Ubben’s ValueAct.

Disclosure: None