Contrasting Salesforce (NYSE:CRM) and Adobe (NASDAQ:ADBE)

Adobe (NASDAQ:ADBE) and Salesforce (NYSE:CRM) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Adobe and Salesforce, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adobe	0	9	16	2	2.74
Salesforce	2	8	28	4	2.81

Adobe currently has a consensus price target of $496.75, indicating a potential upside of 31.21%. Salesforce has a consensus price target of $349.08, indicating a potential upside of 32.65%. Given Salesforce’s stronger consensus rating and higher probable upside, analysts plainly believe Salesforce is more favorable than Adobe.

Volatility & Risk

Adobe has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500. Comparatively, Salesforce has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500.

Valuation & Earnings

This table compares Adobe and Salesforce”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adobe	$22.60 billion	7.14	$5.56 billion	$15.63	24.22
Salesforce	$37.90 billion	6.64	$6.20 billion	$6.39	41.18

Salesforce has higher revenue and earnings than Adobe. Adobe is trading at a lower price-to-earnings ratio than Salesforce, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

81.8% of Adobe shares are owned by institutional investors. Comparatively, 80.4% of Salesforce shares are owned by institutional investors. 0.2% of Adobe shares are owned by insiders. Comparatively, 3.2% of Salesforce shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Adobe and Salesforce’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Adobe	30.39%	53.68%	24.17%
Salesforce	16.08%	12.94%	7.99%

Summary

Salesforce beats Adobe on 8 of the 15 factors compared between the two stocks.

About Adobe

Adobe Inc., together with its subsidiaries, operates as a diversified software company worldwide. It operates through three segments: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment offers products, services, and solutions that enable individuals, teams, and enterprises to create, publish, and promote content; and Document Cloud, a unified cloud-based document services platform. Its flagship product is Creative Cloud, a subscription service that allows members to access its creative products. This segment serves content creators, students, workers, marketers, educators, enthusiasts, and communicators. The Digital Experience segment provides an integrated platform and set of applications and services that enable brands and businesses to create, manage, execute, measure, monetize, and optimize customer experiences from analytics to commerce. This segment serves marketers, advertisers, agencies, publishers, merchandisers, merchants, web analysts, data scientists, developers, and executives across the C-suite. The Publishing and Advertising segment offers products and services, such as e-learning solutions, technical document publishing, web conferencing, document and forms platform, web application development, and high-end printing, as well as Advertising Cloud offerings. It also provides consulting, technical support, and learning services. The company offers its products and services directly to enterprise customers through its sales force and local field offices, as well as to end users through app stores and through its website at adobe.com. It also distributes products and services through distributors, value-added resellers, systems integrators, software vendors and developers, retailers, and original equipment manufacturers. The company was formerly known as Adobe Systems Incorporated and changed its name to Adobe Inc. in October 2018. Adobe Inc. was founded in 1982 and is headquartered in San Jose, California.

About Salesforce

Salesforce, Inc. provides Customer Relationship Management (CRM) technology that brings companies and customers together worldwide. The company's service includes sales to store data, monitor leads and progress, forecast opportunities, gain insights through analytics and artificial intelligence, and deliver quotes, contracts, and invoices; and service that enables companies to deliver trusted and highly personalized customer support at scale. In addition, its platform offering comprise a flexible platform that enables companies of various sizes, locations, and industries to build business workflow and apps with customer; online learning platform that allows anyone to learn in-demand Salesforce skills; and Slack, an intelligent productivity platform. The company's marketing services enables companies to plan, personalize, automate, and optimize customer marketing journey, connecting interaction, and connected products; and commerce services, which empowers shopping experience across various customer touchpoint, such as mobile, web, social, and stores and provides click-to-code tools that offers customers to build and deploy solutions. Further, its analytics offering includes Tableau, an end-to-end analytics solution for range of enterprise use cases and intelligent analytics with AI models, spot trends, predict outcomes, creates summaries, timely recommendations, and take action from any device; and integration service including MuleSoft, which provides building blocks to deliver end-to-end and connected experiences. Additionally, the company provides data cloud, a hyperscale data engine native to Salesforce; vertical services to meet the needs of customers in industries, such as financial services, healthcare and life sciences, manufacturing and automotive and government; and offers salesforce starter for small and medium-sized businesses. Salesforce, Inc. was incorporated in 1999 and is headquartered in San Francisco, California.