"We believe the subscription transition is a TAM-expanding move," analysts said, referring to the Technology Acceptance Model, an information systems theory that models how users come to accept and use a technology.
The analyst firm added that even though it may ultimately dilute the ARPU from the original $40 price target, the larger subscriber base should drive revenue, earnings, and cash flow to levels above expectation.
Separately, Adobe Systems announced recently that it will partner with Microsoft Corp. (MSFT) to transform and redefine how enterprises manage their marketing, sales and customer service to better engage their customers.
Shares of Adobe Systems closed up 3.05% to $79.43 yesterday.
TheStreet Ratings team rates ADOBE SYSTEMS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ADOBE SYSTEMS INC (ADBE) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, solid stock price performance and growth in earnings per share. We feel its strengths outweigh the fact that the company shows weak operating cash flow."