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

The Case for Adobe Stock

Adobe is benefiting from strong demand for AI-powered Creative Cloud Pro and Acrobat, as well as AI-first products, Firefly and Acrobat AI Assistant. The monthly active users of Acrobat and Express grew approximately 25% year over year within the Business Professionals and Consumers segment in the third quarter of fiscal 2025. Adobe has been successfully monetizing Acrobat offerings, including the AI assistant and the Acrobat Studio. 

The Creative Professionals business is benefiting from increasing demand and usage of AI in Photoshop, Premiere Pro and Illustrator as part of the new Creative Cloud Pro offering. The addition of Firefly and third-party models in Creative Cloud Applications is driving generative AI (Gen AI) usage. The Marketing professionals’ business benefits from the strong demand for Adobe Experience Platform (AEP) and native applications. The addition of Google Gemini Flash 2.5, Veo and Imagen models, along with models from OpenAI, Black Forest Labs, Runway, Pika, Ideogram and others into Adobe applications is driving clientele.

Workfront, Frame, AEM Assets, Firefly Services and GenStudio for performance marketing products, which comprises the integrated GenStudio solution, now exceed $1 billion in ARR and are growing more than 25% year over year. One Adobe deal saw 60% year-over-year growth, reflecting an improving footprint among enterprises.

Adobe now expects fiscal 2025 revenues between $23.65 billion and $23.7 billion ($21.51 billion in fiscal 2024), up from the previous guidance range of $23.5-$23.6 billion. For fiscal 2025, the Zacks Consensus Estimate for revenues is currently pegged at $23.67 billion, suggesting 10.1% growth from 2024’s reported figure.

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 third 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. Introduction of Powered by Blueprint, which allows select partners to make Blueprint their own by embedding their best practices into the tool and branding it with their name and logo, is expanding PEGA’s ecosystem.

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 & PEGA’s Earnings Estimate Revision Steady

The Zacks Consensus Estimate for Adobe’s fiscal 2025 earnings is pegged at $20.77 per share, unchanged over the past 60 days, indicating a 12.76% increase over fiscal 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 5.1% to $2.08 per share over the past 60 days, suggesting 37.8% growth from 2024.

Price Performance and Valuation – PEGA vs. ADBE

In the trailing 12 months, Adobe shares have lost 38.2%, underperforming Pegasystems’ appreciation of 14.9%.

Adobe and PEGA Stock’s Performance

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

In terms of forward 12-month price/sales, Adobe shares are trading at 5.15X, higher than PEGA’s 5.08X.

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 despite stretched valuation. However, stiff competition and stretched valuation make Pegasystems’ 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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