Adobe has a competitive advantage with its Creative Cloud subscription bundle. The next leg of growth could be fuelled by Adobe's Creative Cloud Express product for non-professionals, and by metaverse-ready products Adobe's Substance 3D and Aero. However, Adobe's moat is narrowing due to the tight competitive landscape. The next leg of growth may be challenging.
Netflix reported a surprise membership decline in Q1 and is forecasting a loss of an additional 2 million members in Q2 2022. With the US and Canadian markets fully penetrated and Europe and Latin America more mature, the focus has shifted to password sharing, monetization of nonpaying users, and price increases. The growth slowdown has drawn attention to Netflix’s business model which consistently generates negative free cash flow, -$8.6 billion over the past decade. With industry competition hitting a fevered pitch, the market is weighing two questions. Is Netflix a growth stock? Are Netflix’s reported earnings reflective of the true business economics? Netflix is down over 70% from recent highs while trading at a 32% discount to its peers and sitting atop long-term support levels. The r