I’m not going to rehash the qualitative discussion here. It’s already been discussed extensively in this sub, almost to the point of becoming spam.
If you’ve been following the conversations, the key points should be hard to miss. And if you somehow missed them, you may have been living under a rock.
So here's my back-of-hand valuation with assumed inputs --
# Four scenarios
|`Scenario`|`Rev growth path`|`Op margin`|`Terminal ROIC`|`WACC`|`Value/share`|`Prob`|
|:-|:-|:-|:-|:-|:-|:-|
|`Bear: AI hollows the core, ARR stalls, pricing erodes`|`6%→1%`|`→30%`|`14%`|`10.5%`|`~$180`|`30%`|
|`Base: growth decelerates gracefully, margin holds ~36%`|`9%→4%`|`37%→35%`|`20%`|`9.5%`|`~$305`|`35%`|
|`Moat: Firefly monetizes, integrated workflow defends pricing`|`11%→5%`|`38%`|`25%`|`9.2%`|`~$370`|`25%`|
|`Bull: GenStudio/Firefly become enterprise content-supply-chain engines`|`13%→6%`|`40%`|`28%`|`9.0%`|`~$440`|`10%`|
Probability-weighted intrinsic value ≈ $298. The base case alone (\~$305) sits \~40% above the current price, and even the bear case (\~$180) is only \~10% below it. That is the asymmetry.
The market price of \~$200 is essentially giving almost no credit to the moat/bull tail.
# On Relative Valuation Basis
Adobe trades at roughly 10x forward earnings -- a sticky (ik ik don't fight me over this now) subscription franchise with strong margins, $9+ billion FCF, and a $25 billion buyback shrinking the share count, versus workday at 11.76x NTM P/E and servicenow at 23.77x. On FY26 non-GAAP EPS guidance of $23.30 to $23.50: a disruption-discounted 12x → \~$281; a "fair-for-quality-but-cautious" 14.5x → \~$340. FCF lenses (14–18x FCF vs the historical mid-20s) cluster \~$345–440. Relative midpoint \~$310, reconciling tightly with the DCF.
Blended target (≈65% DCF / 35% relative): **\~$300**
If you ask why 65/35 weightage - I like nice round numbers