Adobe Inc. (ADBE) shares have declined 27% over recent weeks, prompting investor debate on whether to buy ahead of December 10. The sharp drop raises questions about valuation, market sentiment, and potential rebound opportunities.
- ADBE stock has declined 27% over the past six weeks
- Recent earnings guidance fell below analyst expectations
- RSI has dropped below 30, signaling potential oversold condition
- Trailing P/E ratio now at 34.2, below its 5-year average of 41.8
- Increased put-call ratios and selective institutional buying observed
- December 10 is a focal date for investor sentiment reassessment
Adobe Inc. (ADBE) has experienced a steep 27% decline in its stock price over the past six weeks, marking one of the most pronounced corrections in the software sector this year. The drop comes amid broader tech sector volatility and investor concerns over slowing growth in digital marketing and creative tools subscriptions. Despite strong year-over-year revenue from Creative Cloud and Document Cloud, recent earnings guidance fell short of expectations, contributing to the sell-off. The market reaction intensified after a mid-November update revealed a slowdown in new user acquisition, particularly in international markets. Analysts have revised earnings estimates downward for the next fiscal quarter, with some projecting diluted EPS of $2.15 compared to the prior $2.32 consensus. This shift reflects caution around Adobe’s ability to sustain high-margin revenue growth amid increasing competition from AI-driven tools like Canva and Figma. Despite the downturn, several technical indicators suggest potential oversold conditions. The relative strength index (RSI) has dipped below 30, a threshold often associated with short-term reversal possibilities. Additionally, options data shows elevated put-call ratios, hinting at defensive positioning by traders. With the company’s trailing P/E ratio now at 34.2, below its 5-year average of 41.8, some investors see value in the current price action. The upcoming date of December 10 is being watched closely, not because of an earnings release or product launch, but as a psychological threshold for traders to reassess overreaction. Institutional investors have been accumulating shares at lower levels, and selective buying has been observed in the last three trading sessions. The stock’s performance in the following week will be a key signal for momentum traders and long-term holders alike.