Can Adobe Stock Recover If Markets Fall?
Adobe (ADBE) stock is down 17.7% in 21 trading days. The recent slide reflects renewed concerns around generative AI disruption and competitive pressure, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Adobe stands today.
- Size: Adobe is a $103 Bil company with $24 Bil in revenue currently trading at $246.68.
- Fundamentals: Last 12 month revenue growth of 10.5% and operating margin of 36.6%.
- Liquidity: Has Debt to Equity ratio of 0.06 and Cash to Assets ratio of 0.22
- Valuation: Adobe stock is currently trading at P/E multiple of 14.4 and P/EBIT multiple of 11.4
- Has one instance since 2010 where it dipped >30% in < 30 days and subsequently returned 80.9% within a year. See ADBE Dip Buy Analysis.
These metrics point to a Strong operational performance, alongside Low valuation – making the stock Attractive. For details, see Buy or Sell ADBE Stock
That brings us to the key consideration for investors worried about this fall: how resilient is ADBE stock if markets turn south? This is where our downturn resilience framework comes in. Suppose ADBE stock falls another 20-30% to $173 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
2022 Inflation Shock
- ADBE stock fell 60.0% from a high of $688.37 on 19 November 2021 to $275.20 on 30 September 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $634.76 on 4 February 2024 , and currently trades at $246.68
| ADBE | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -60.0% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- ADBE stock fell 25.6% from a high of $383.28 on 19 February 2020 to $285.00 on 12 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 20 May 2020
| ADBE | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -25.6% | -33.9% |
| Time to Full Recovery | 69 days | 148 days |
2018 Correction
- ADBE stock fell 25.5% from a high of $275.49 on 1 October 2018 to $205.16 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 23 April 2019
| ADBE | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -25.5% | -19.8% |
| Time to Full Recovery | 120 days | 120 days |
2008 Global Financial Crisis
- ADBE stock fell 66.7% from a high of $48.00 on 24 October 2007 to $15.98 on 3 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 12 July 2013
| ADBE | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -66.7% | -56.8% |
| Time to Full Recovery | 1,592 days | 1,480 days |
Feeling jittery about ADBE stock? Consider portfolio approach.
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