Adobe Stock Down 22%,Time to Buy?
Adobe (ADBE) stock has fallen by 21.5% in less than a month, from $327.65 on 12th Jan, 2026 to $257.16 now. Should you buy this dip?
Dip buying is a viable strategy for quality stocks that have a history of recovering from dips. As it turns out, ADBE stock passes basic quality checks There is only one past instance where it dipped sharply, and returned 81% during the subsequent 12-month period, with peak return reaching 89%. We define sharp dip as stock going down 30% or more, in less than 30 day period.
Below, we get into details of historical dips and subsequent returns.
Historical Median Returns Post Dips
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| Period | Past Median Return |
|---|---|
| 1M | -2.0% |
| 3M | 9.8% |
| 6M | 21.2% |
| 12M | 80.9% |
Historical Dip-Wise Details
ADBE had 1 events since 1/1/2010 where the dip threshold of -30% within 30 days was triggered
- 89% median peak return within 1 year of dip event
- 354 days is the median time to peak return after a dip event
- -8.1% median max drawdown within 1 year of dip event
| 30 Day Dip | ADBE Subsequent Performance | |||||||
|---|---|---|---|---|---|---|---|---|
| Date | ADBE | SPY | 1Y | Peak Return |
Max Drop |
# Days to Peak |
||
| Median | 81% | 89% | -8% | 354 | ||||
| 9162022 | -30% | -7% | 81% | 89% | -8% | 354 | ||
Adobe Passes Basic Financial Quality Checks
Revenue growth, profitability, cash flow, and balance sheet strength need to be evaluated to reduce the risk of a dip being the sign of a deteriorating business situation.
| Quality Metrics | Value | Quality Check |
|---|---|---|
| Revenue Growth (LTM) | 10.5% | Pass |
| Revenue Growth (3-Yr Avg) | 10.5% | Pass |
| Operating Cash Flow Margin (LTM) | 42.2% | Pass |
| Leverage (see below) | – | Pass |
| => Interest Coverage Ratio | 34.2 | |
| => Cash To Interest Expense Ratio | 25.1 |
Not sure if you can take a call on ADBE stock? Consider portfolio approach
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