Adobe Q3 billings hit $6.71B as analysts see revenue deceleration

Adobe (ADBE) reported third-quarter billings of $6.71 billion, a figure that StockStory analysts describe as underwhelming due to an average year-on-year growth rate of 11.9% over the last four quarters. The firm attributes this performance to increasing competition that is causing challenges in acquiring and retaining customers. Since April 2026, the stock has posted a 3.1% return, trading around $254.84, which trails the S&P 500's 8.9% gain over the same period.

Billings, often referred to as "cash revenue," measures the money collected from customers in a specific period, distinct from recognized revenue which is spread over contract lengths. While Adobe's recent billings growth has slowed, sell-side analysts project revenue to rise by 9.3% over the next 12 months. This forecast represents a slight deceleration from the company's 11.5% annualized growth rate recorded over the past five years. StockStory notes that such slowing growth typically exerts downward pressure on valuation multiples and stock prices.

The analysis emphasizes GAAP operating margin over adjusted profits, arguing that stock-based compensation is a legitimate expense for talent retention rather than a metric to be excluded. Adobe's operating margin has remained relatively stable over the last two years, standing at 35.7% for the trailing 12 months. The firm questions why revenue growth has not provided greater leverage on fixed costs to improve economies of scale, suggesting potential inefficiencies in the expense base.

With shares trading at 3.4 times forward price-to-sales, or $254.84 per share, StockStory deems the valuation fair but lacks confidence in the company's future performance relative to its standards. The firm recommends looking toward other opportunities, specifically highlighting a top digital advertising platform riding the creator economy as a preferred alternative. In a separate note on growth stocks, StockStory cites Meta, CrowdStrike, and Broadcom as past winners with returns of 315%, 314%, and 455%, respectively, alongside Nvidia's 1,460% gain and Exlservice's 271% increase between June 2020 and June 2025.