Adobe (ADBE) to Boost Creative Capabilities With ContentCal Adobe (ADBE) inks a deal to buy ContentCal. This is expected to bolster its footprint in the content marketing space.
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Adobe ADBE has entered into a definitive agreement to acquire the London-based social marketing startup ContentCal to bolster its creative offerings.
ContentCal operates a platform that aids businesses in creating and publishing their marketing content online.
Further, ContentCal's social media and content marketing solution automates the process of scheduling, publishing and reporting the content across various social media platforms such as Twitter, Facebook and LinkedIn to name a few.
Moreover, the startup gained strong traction among several individuals and companies on the back of its robust platform.
Therefore, we believe that the latest move is likely to drive Adobe's momentum among the various enterprises, especially the small businesses for which ContentCal's marketing solution turned out to be very useful in achieving work efficiency.
The acquisition under review is expected to close in first-quarter fiscal 2022.
Growth Prospects
Per a Research Dive report, the global content market for content marketing is expected to generate revenues worth $137.2 million by 2026. The figure is projected to register a CAGR of 16.2% over the period of 2020- 2027.
Growing adoption of content marketing tools and software by the businesses to accelerate their customer engagement rate is driving growth in this particular market.
Also, companies consider these tools a strong solution to their business, product promotion and building relationship with customers.
Additionally, growing proliferation of Internet streaming remains a major growth factor behind the boom in the content marketing space.
We note that with ContentCal, Adobe will be well-poised to capitalize on the aforementioned growth opportunities.
Further, Adobe is likely to intensify competition for HubSpot HUBS, a provider of inbound marketing and sales application.
HubSpot aids businesses in attracting customers through search engine optimization, social media, blogging, website content management and marketing automation. HUBS is already reeling under the competitive pressure posed by Adobe's Digital Media Solutions segment.
Deep Focus on Creative Tools
The latest move bodes well for Adobe's consistent efforts in strengthening its creative tools.
Moreover, strategic acquisitions have been playing a significant role in shaping up the growth trajectory of Adobe in the digital media market.
Adobe recently completed the acquisition of a leading cloud-enabled video review and collaboration platform named Frame.io, which testifies the above-mentioned facts. Frame.io's solutions simplify the production procedure, and thus video editors and project stakeholders can seamlessly collaborate via leveraging cloud-first workflows.
Adobe combined Frame.io's solutions with its creative software like Adobe Photoshop, Adobe Premier Pro and other Adobe Creative Cloud applications
We believe, all these endeavors will likely boost the adoption rate of Adobe Creative Cloud, which in turn, will drive growth in the Adobe's Digital Media segment.
However, lower end-market demand and increasing acquisition expenses remain major overhangs for Adobe in the near term.
Zacks Rank & Stocks to Consider
Currently, Adobe carries a Zacks Rank #4 (Sell).
Investors interested in the broader technology sector can consider stocks like Advanced Micro Devices AMD and Mimecast Limited MIME, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Advanced Micro Devices has gained 57.9% on a year-to-date basis. The long-term earnings growth rate for the stock is currently projected at 46.2%.
Mimecast has gained 39.7% on a year-to-date basis. The long-term earnings growth rate for the stock is currently projected at 35%.
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