Adobe (NASDAQ:ADBE) makes Flash software for mobile phones used for developing apps and games. It competes with Microsoft (NASDAQ:MSFT), Oracle (NASDAQ:ORCL) and Qualcomm (NASDAQ:QCOM) in this segment. We currently have a Trefis price estimate of around $38 for Adobe’s stock, about 28% above the current market price of around $30.
Trefis members have created forecasts for two key drivers of Adobe’s stock over the last week: (1) Flash Penetration Rate and (2) Global Mobile Phone Units. The members’ forecasts suggest that Flash Penetration Rate as well as Global Mobile Phone Units will trend in line with the Trefis forecast. These projections have no significant impact on Adobe’s stock.
We estimate that Flash for Mobile Phones constitute around 1% of the $38 Trefis price estimate for Adobe’s stock. Hence the stock is hardly impacted by (1) Flash Penetration Rate and (2) Global Mobile Phone Units. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
The average of forecasts for Flash Penetration Rate created by Trefis members indicated a projected increase from around 61% in 2010 to around 81% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from about 53% in 2010 to around 87% by the end of the Trefis forecast period. The member estimates imply little downside to the Trefis price estimate for Adobe’s stock. In the past, Flash Penetration Rate has increased from 10% in 2006 to about 46% in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Adobe’s stock to Flash Penetration Rate.
Our complete analysis for Flash Penetration Rate is here.
The average of forecasts for Global Mobile Phone Units created by Trefis members are in line with the baseline Trefis estimates. Trefis projects an increase in Global Mobile Phone Units from close to 1.3 billion in 2010 to around 1.8 billion by the end of the Trefis forecast period. In the past, Global Mobile Phone Units has increased from around 903 million in 2005 to about 1.2 billion in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Adobe’s stock to Global Mobile Phone Units.
