RiverPark Funds is bullish on Adobe Systems Incorporated (NASDAQ:ADBE) as the fund believes that the company could significantly benefit from the continued global expansion of the market for digital advertising solutions globally. In this article, we’re going to look at the comments made by RiverPark about Adobe in its Long/Short Opportunity Fund Q4 Investor Letter.
So, here is everything that RiverPark said about digital designing software maker:
Adobe shares also performed well this period as the company reported another strong quarter of better than expected results. ADBE posted 25% revenue growth with strong performance across both of its core segments: Digital Media revenue increased 29% year-over-year and Digital Marketing revenue grew a better-than-expected 18%. Expenses were well controlled, allowing operating margins to expand 350 bps to an impressive 40%, which generated EPS growth of 40% year-over-year.
We remain bullish on Adobe’s growth opportunities as the market for digital advertising solutions globally continues to expand and ADBE, through its ability to raise prices, convert existing customers to its subscription Cloud solutions, and capture new customers via innovative new product offerings, takes market share. Management recently cited the company’s total available market as being in excess of $83 billion by 2020 (a sizeable opportunity for the $7 billion in revenue Adobe) and the company’s execution and expense control remain best in class in its industry.
Adobe Systems Incorporated (NASDAQ:ADBE) shares have been performing well, with the stock gaining more than 15% since the beginning of the year. Over the last 12 months, the share price has jumped more than 72%.
At the end of the last month, the maker of digital products for media and marketing announced raising its earnings guidance for fiscal 2018, adding the expected impact of the recently-enacted Tax Cuts and Jobs Act. For fiscal 2018 beginning Dec. 2, Adobe expects an EPS of $6.20, versus $5.50 announced previously. For its fiscal first quarter, the company anticipates $1.43 per share, versus the previous target of $1.27.
ADBE is a popular stock among the hedge funds covered by us at Insider Monkey. There were 65 funds in our database as of the end of September that held shares of Adobe Systems Incorporated (NASDAQ:ADBE). During the fourth quarter of 2017, Junto Capital Management and Lone Pine Capital increased their ownership in Adobe, according to the latest filings.
Meanwhile, you may love to read our coverage of RiverPark’s thoughts on Dollar Tree, Amazon.com, Charles Schwab Corp., and Alliance Data Systems Corp.