ADBE vs. PEGA: Which Enterprise Software Stock is a Better Buy Now?

Adobe ADBE and Pegasystems PEGA are well-known providers of enterprise software stocks. Both are helping enterprises in digital transformation through their respective cloud-supported solutions. While ADBE focuses on offering personalized digital experience solutions supported by AI, PEGA helps enterprises transform their businesses through AI-powered decision-making and a workflow automation platform.  

Digital transformation offers a massive growth opportunity, driven by the growing adoption of cloud computing and AI. Per IDC estimates, the digital transformation market is expected to hit roughly $4 trillion by 2027, seeing a CAGR of 16.2% over the 2022-2027 timeframe. According to Statista, the global market revenues of AI usage in marketing are anticipated to hit roughly $47 billion in 2025 and exceed $107 billion by 2028. Both data sets reflect strong growth opportunities for Pegasystems and Adobe.

So, ADBE or PEGA, which has an edge under the current scenario?

The Case for Adobe Stock

Adobe has expanded its AI portfolio with Adobe GenStudio and Firefly Services, which help brands and their agency partners collaborate on marketing campaigns. 

Adobe’s tools, like Acrobat AI Assistant and Adobe Express, are attracting business professionals and creators. Acrobat AI Assistant uses conversational interfaces to make it easier for users to read digital documents and gain insights within a short timeframe. Adobe Express is using AI to enable consumers to quickly design and publish content through conversational AI in an easy-to-use, all-in-one application. Adobe is integrating these solutions to facilitate a smoother creation-to-consumption process across mobile apps, web browsers and desktop offerings.

Acrobat AI Assistant is unlocking new levels of productivity by cutting time to insights through conversational interfaces. Adobe Express is using AI to enable consumers to quickly design and publish engaging content through conversational AI in an easy-to-use, all-in-one application. Adobe is integrating these solutions to facilitate a smoother creation-to-consumption process across mobile apps, web browsers and desktop offerings. Adobe’s monthly active users across these categories surpassed more than 700 million users at the end of the second quarter of fiscal 2025.

Adobe’s AI book of business from AI-first products, including Acrobat AI assistant, Firefly App and Services and GenStudio for Performance Marketing, is tracking ahead of the $250 million ending Annual Recurring Revenue (ARR) target by the end of fiscal 2025. The company exited the fiscal second quarter with Digital Media ARR of $18.09 billion, up 12% year over year.

The Case for PEGA Stock

Pegasystems is benefiting from robust demand for its AI-powered and cloud-based solutions. As organizations accelerate digital modernization, the company’s platform continues to gain traction, ensuring durable, long-term growth potential in a market that is expected to reach over $150 billion by 2029.

Pegasystems’ completion of the shift to the subscription-based business model has been a key catalyst. Annual Contract Value (ACV), which grew 14% year over year at constant currency in the second quarter of 2025, is expected to remain robust thanks to ongoing digital transformation, strong adoption of Pega GenAI Blueprint and case-based pricing approach.

Pega Blueprint, the generative AI-powered workflow design agent, accelerates application development projects from months to weeks. PEGA is expanding capabilities that include the usage of agentic AI to ingest, analyze and convert a wide array of legacy system assets, including videos, documentation, UI screens, technical files, and source code, into modern applications much faster.

The company’s expanding enterprise clientele in key verticals, including financial services, insurance, telecommunications, health care, manufacturing and public sector, is noteworthy. However, stiff competition from Microsoft and Oracle in the business process management domain is a concern.

ADBE’s Earnings Estimate Revision Steady, PEGA’s Rises

The Zacks Consensus Estimate for Adobe’s fiscal 2025 earnings is pegged at $20.63 per share, unchanged over the past 30 days, indicating a 12% increase over 2024’s reported figure.
 

Adobe Inc. Price and Consensus

Adobe Inc. price-consensus-chart | Adobe Inc. Quote

The consensus mark for PEGA’s 2025 earnings has increased 5.3% to $1.98 per share over the past 30 days, suggesting 31.1% growth from fiscal 2024.

Price Performance and Valuation – PEGA vs. ADBE

Year to date, Adobe shares have lost 18.6%, underperforming Pegasystems’ decline of 21.8%.

Adobe and PEGA Stock’s Performance

Both Pegasystems and Adobe are overvalued, as suggested by the Value Score of D. 

In terms of forward 12-month Price/Sales, Adobe shares are trading at 6.11X, higher than PEGA’s 5.13X.

ADBE and PEGA Valuation

Here’s Why Adobe is a Better Buy Than PEGA

Adobe’s focus on improving monetization of its AI tools is a positive for investors. However, stiff competition and PEGA’s stretched valuation make the stock risky for investors in the near term.

Currently, Adobe has a Zacks Rank #2 (Buy), making the stock a stronger pick compared with Pegasystems, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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