I picked these to compare since they both run a subscription based model and have similar marketcaps (250 billion or so), and pe (54 or so) As of right now im leaning towards adobe, the reason is because they have few competitors, diverse products range. I believe they have better growth potential thanks to better pricing power and more user growth potential. (us&international growth vs netflix primarily international) higher margins (40% vs 16%), stock buybacks (-1% vs +1% dilution), high switching costs better moat, much better balance sheet for adobe.
On a forward pe, adobe is about 10% more expensive (fwd pe of 44 vs 40) and marketcap wise it is about 25% higher. (adobe makes about 15% more profit) The main benefit for netflix is improving margins over time but I only see net profit margins going to 25% max.
One thing I want to add for adobe has over 100 products with 60% being creative cloud and that alone has 20-30 famous products like photoshop, primer pro, the stuff you know adobe for. document cloud and digital experience no one knows but that segment is growing like crazy whereas netflix makes 99% of revenue from one main product. the two segments for adobe is mostly business to business like digital marketing, digital signatures, data analytics, ai, ecommerce sales, publishing, and much more and makes 40% of sales and growing in a fast market where things are going more digital (think youtube, shopify, docusign). I just dont see much growth for netflix where pretty much in the us more than 70 million users out of 120 million households have it already.
But i put up an poll on whats better and everyone said netflix, but no one really explained why? is adobe underrated and should it replace netflix in faang, or is netflix still king and explain why it is better because i dont get the hype and why everyone still use faang for big tech synonym when they are several other growth tech companies like adobe that have much higher marketcap than netflix. anyways, what is your pick on whats the better company
Submitted July 31, 2021 at 01:38AM by doggy_lovers https://ift.tt/3ytvcNn
