The technology sector has been hit very hard this year - and rightfully so. Valuations across the board appear to have gotten ahead of earnings, in many cases. For companies like Adobe Inc. (NASDAQ:ADBE) which now trade at levels not seen since the beginning of 2019, questions abound as to how such companies will perform in 2019, given the newly minted bear market we are all dealing with.
Sentiment has become increasingly bearish, resulting in a ebbing tide which has brought the valuation of even the best companies down with the crowd. Adobe appears to be no different, on a downward trajectory not dissimilar from most of the company's peers.
The reality remains that Adobe is one of the few elite technology giants exhibiting a runway that appears to be wide and long enough to take investors well into the future with stable growth rates for the foreseeable future. The software company has grown its top and bottom line by double-digit margins for quite some time, boasting operating margins around 30% and multi-billion-dollar share buybacks, putting money back into the pockets of shareholders at a time when many companies are hoarding cash.
The company's software as a service (SAAS) model is less prone to economic downturns than many peers in the software space, with Adobe's suite of software largely considered to be "mission critical" for most companies and individuals. In good times and bad, investors picking companies like Adobe with relatively wide moats should outperform.
Invest wisely, my friends.
