Adobe slips as more analysts downgrade software maker after expensive Figma deal
David Tran

Adobe (NASDAQ:ADBE) slipped again on Monday, as more analysts downgraded the software maker after last week's news that it was spending $20B to acquire competitor Figma, a price tag which many experts have deemed expensive.
Wells Fargo analyst Michael Turrin lowered his rating to equal weight from overweight, noting that the Figma deal is "the right product fit," but the price tag leaves "no room for error." The analyst added it is the largest transaction for a private software company and the highest multiple ever paid, indicating it may have been a competitive process.
"As a result, we expect investor questions around slowing growth [and] increasing competition on the digital media side of the business to only intensify, [especially] given 3Q results/4Q guidance suggest price increases arenât providing as much of an offset as anticipated," Turrin wrote in a note.
The analyst also posited that concerns are likely to "linger" and Adobe (ADBE) shares will remain "range bound" given that the deal is not expected to close until 2023. 
Investment firm Edward Jones also downgraded Adobe (ADBE), with analyst Logan Punk citing concerns about the proposed deal.
"We can see the merits, but the significant premium paid, shareholder dilution, and longer integration timeline increase the execution risk," Punk wrote in a note to clients. 
Adobe (ADBE) shares fell 1.5% to $295 in premarket trading, extending last week's decline.
On Friday, several other Wall Street analysts downgraded Adobe (ADBE) after it announced the deal and issued mixed financial results. 
Analysts are largely cautious on Adobe (ADBE). It has a HOLD rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates ADBE a HOLD.