Adobe gets no relief after it 'overpaid' for Figma
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Wall Street showed little enthusiasm for Adobe (NASDAQ:ADBE) as trading progressed Thursday, with Oppenheimer analyst Brian Schwartz adding to the overall skepticism about the creative software company.
Schwartz cut his rating on Adobe (ADBE) to perform from outperform, and also removed his $400-a-share price target on the company's stock. Schwartz said there is "a lot to like with Adobe," but the company has suffered from "inconsistent execution" for several quarters.
Even moreso, Schwartz didn't hold back with his thoughts about Adobe's (ADBE) $20B cash-and-stock acquisition of web-first collaborative design platform company Figma, which was announced prior to the start of trading on Thursday.
"We think the company overpaid for Figma," Schwartz said, adding that the high price tag "indicates it was a defensive move, and the deal adds another layer of execution risk over the next few quarters.
Additionally, Schwartz said that Adobe's investors "are likely going to be skeptical that a turnaround in business momentum will be a near-term event."
Investors weren't shy about showing their feelings about Adobe (ADBE) in the wake of its Figma deal, as they sent the company's shares down by almost 17% on Thursday.