The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.

Adobe Stock Prediction

Summary:

Adobe has finally released its popular iOS apps like Comp CC and Photoshop Fix to the Android platform.

Comp CC is a full-pledged mock-up software for User Interface, print, and web designers.

There are more than 1 billion daily active users of Android devices. Some of them will eventually become users of Adobe’s Android apps.

User will have to sign-up for an Adobe ID to use Comp CC. I bet some of them will eventually become subscribers of Adobe’s Creative Cloud CC software products.

The Android crowd is therefore a growth catalyst for Adobe’s subscription-only Creative Cloud software business.

There are more than one billion daily active users of Android devices. Adobe’s (ADBE) decision to release Android versions of its popular iOS apps like Comp CC and Photoshop Sketch is therefore smart. There are millions of amateur and professional photographers, designers, graphic artists, and illustrators who definitely own Android phones and tablets.

By requiring Android device owners to sign up for an Adobe ID to use these Adobe apps, Creative Cloud could attract new subscribers. Comp CC and Photoshop Sketch are powerful but they are still companion apps to Adobe’s paid subscription-only Photoshop CC, InDesign CC, and Illustrator CC software programs.

Adobe’s free-to-use mobile apps are just for design idea generation, not for professional content creation.

(Source: Adobe)

Why It Matters

Android device users who use and enjoy Comp CC and Photoshop Sketch will eventually have to pay $9.99 or $19.99 per month to improve their designs. The logic is that Android apps are baits that will hook up individuals to sign-up for a trial version of Adobe Photoshop or Illustrator CC. The more people who signs up for a trial version of Adobe’s software programs, the better it will be for Adobe’s Annual Recurring Revenue business.

Creative Cloud subscriptions is Adobe’s biggest revenue generator. As of September 2016, annual recurring revenue from Creative Cloud subscribers is already more than $3.22 billion. Recruiting more Android device owners to subscribe to Creative Cloud software products could help Adobe breach $4.3billion in Annual Recurring Revenue this year.

Below is Adobe’s latest Earnings Report chart. More than 7 million subscribers of Creative Cloud is helping Adobe post record quarterly revenue and profit.

(Source: Adobe)

Adobe could gain 200k or 500k new Creative Cloud subscriptions from the Android device user population. It is my fearless forecasts that there will be people who will get encouraged to try a career in design or photo editing after they become experts in Comp CC or Photoshop Sketch.

Job boards for graphic designers, UI/UX artists, and photo manipulation of course still require people to be adept in desktop-class software like Adobe Photoshop, Illustrator, and InDesign CC. In short, Adobe is giving away free mobile apps to encourage people to become career design professionals. The more design professionals there are, the more customers there will be for Adobe’s software subscription products.

Recruiting 500k people to sign up for a $9.99/month Photoshop subscription is already a windfall for Adobe.

500,000 x $9.99 x 12 months = $59.94 million

That $59.94 million guesstimate is just for one software, Photoshop. Adobe charges $19.99/month for Illustrator CC (vector illustration program and InDesign CC (page layout program).

Android users of Adobe mobile apps could also become repeat customers of Adobe Stock. Yes, sir. Adobe Stock is a commercial image/video/design licensing service like Getty Images and Shutterstock. Adobe gets a fee from every image licensed through its crowd-sourced Adobe Stock platform.

Conclusion

Adobe’s stock is already up by more than 14% over the last six months. However, I still see ADBE hitting $112 before 2016 ends. I truly believe that Adobe will have more than 8 million Creative Cloud subscribers by this fourth quarter. ADBE’s price could jump 5-10% higher next month after the company does its Q4 Earnings Report.

Let us not forget that November/December period is when people get their 13th month pay and Christmas bonuses. It means people have more throwaway money to buy gifts for themselves and their loved ones. Android device owners who enjoyed Adobe’s Comp CC, Photoshop Fix, and Photoshop Sketch apps might be tempted to buy an annual subscription to Photoshop and or Illustrator CC.

Near-term algorithmic forecasts are also very positive for ADBE. I trust the market signals from I Know First so I’m very confident that ADBE will trade above $110 before 2016 ends. Buy some 30-day ADBE call options and you might get rewarded.

I Know First Past Success With ADBE

I Know First has been bullish on ADBE in past forecasts. On May 26th, 2016, an I Know First analyst had written a bullish long-term outlook on ADBE and its competitive advantages in the market. In accordance with I Know First’s state of the art algorithm, ADBE shares have risen by almost 9% to date.

This bullish forecast was sent to current I Know First subscribers on May 25th, 2016. To subscribe today click here.