Adobe's latest earnings report was the software company's 18th consecutive quarter of positive earnings.
If you invested in Adobe 10 years ago, you would have made a strong profit.
According to CNBC calculations, a $1,000 investment in 2009 would be worth over $8,500 as of Tuesday, when its fiscal third quarter earnings report beat expectations on profits and revenue. That's a total return of around 750%. By comparison, a $1,000 investment in the S&P 500 would have earned around 245%. Adobe's share price is hovering around $276 in Wednesday's premarket, down 3% from Tuesday's close because of its lower guidance for the fourth quarter.
While well known for its multimedia and creativity software products, such as Photoshop and Adobe Creative Cloud, the company does much more.
The software giant can be broken down into three major segments: digital media, digital experience and publishing. In addition to offering the Creative Cloud and other services, the digital media portion of the business helps small and medium-sized enterprises produce content and distribute it to their audiences via an array of media platforms. The digital experience segment provides digital marketing insights to organizations, and the publishing sector focuses on legacy products and services, such as eLearning and web app development.
CNBC: Adobe stock as of September 17, 2019.
Adobe has been doing so well that it may end up posing a threat to brick-and-mortar retail, CNBC "Mad Money" host Jim Cramer said in June.
"You just can't compete against digital merchants if those merchants are armed with Adobe. I don't know how you do it," Cramer said. That's because Adobe's services can replicate the "best parts" of traditional shopping malls online, Cramer said. By having consumers shop via the web rather than in stores, designers and retailers can more effectively target their audience without having to deal with as many inventory risks. They can also scale their businesses much more rapidly, Cramer said.
Representatives from each company meet on a weekly basis and after a nearly year of work, the group came up with a software model that uses each company's products to collect and combine data in one place. If widely embraced by companies around the world, this new development could stunt the growth of Salesforce, a cloud-based company that leads the sales tools space.
Adobe aims to expand its audience to drive growth. CEO Shantanu Narayen hopes newer products like Adobe Spark will incentivize people to become Adobe users. Launched in 2016, Adobe Spark is made up of three media creation applications (Spark Page, Spark Post and Spark Video), that allow users to easily create graphics, web pages, video stories and more.
If you are thinking about getting into investing, experts such as Warren Buffett often advise starting with index funds, which hold groups of stocks, such as the S&P 500. Since index funds fluctuate with the market, they're less risky than individual stocks, making them a safer choice for beginners.
Here's a snapshot of how the markets look now.
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