Adobe's (ADBE 0.11%) stock is up immediately following its latest earnings report. For the fourth quarter of fiscal 2022, which ended on Dec. 2, the cloud-based software company's revenue grew 10% year over year (14% in constant currency) to $4.53 billion and matched Wall Street's expectations. Its adjusted earnings increased 12% to $3.60 per share and cleared the consensus forecast by a dime.

For the fiscal 2023 first quarter, Adobe expects revenue to rise 8% to 9% on a reported basis, while adjusted earnings per share (EPS) climb between 8% and 10%. Both estimates matched analysts' expectations.

Two app developers work together on a PC.

Image source: Getty Images.

Adobe's growth rates look stable, but its stock remains down more than 40% this year. Let's review the bear and bull cases for this tech giant to see if it's worth buying as macro headwinds continue to rattle the markets.

What the bears will tell you about Adobe

The bears will point out that Adobe's growth is still decelerating. After rising 15% in fiscal 2020 and another 23% in fiscal 2021, its reported revenues grew just 12% in fiscal 2022. For fiscal 2023, management expects revenue to rise between 8% and 10% as adjusted EPS increase 11% to 13%.

Adobe attributed that slowdown to tough comparisons to the post-pandemic recovery of the media and enterprise sectors in fiscal 2021, which coincided with inflation, rising interest rates, and other macro headwinds throughout fiscal 2022. A strong dollar also reduced Adobe's overseas revenue and prompted it to start reporting its growth in constant-currency terms.

The full-year forecast also doesn't reflect its proposed $20 billion (half cash, half stock) acquisition of the design software firm Figma. The bears believe Adobe overpaid for Figma -- at 50 times its estimated $400 million in annual recurring revenue this year -- and its eventual integration with Adobe will squeeze the combined company's margins and dilute shareholders.

That's troubling, because Adobe's margins are already shrinking. In fiscal 2022, its gross margin declined about 50 basis points to 87.7% while its operating margin dropped approximately 210 basis points to 34.6%. The near-term macro challenges, currency headwinds, and costs of integrating Figma could all further reduce its profitability throughout fiscal 2023.

What the bulls will tell you about Adobe

The bulls believe that Adobe's core businesses are still evergreen, even if they face some near-term headwinds. Its flagship Creative Cloud services -- including Photoshop, Illustrator, and Premiere Pro -- are still industry-standard tools for media and design professionals. Therefore, its takeover of Figma, a major competitor for the Creative Cloud's Adobe XD user interface and user experience platform, makes sense and should solidify Adobe's dominance of the digital design market.

Adobe's digital media segment, which houses its Creative Cloud services, grew its revenues 11% in fiscal 2022. The company expects the segment's revenue to rise between 8% and 9% in fiscal 2023 before it even acquires Figma, which indicates its core services will continue to lock in more users with sticky subscriptions.

The bulls will also point out that Figma's gross margins are at about 90%, its operating cash flows are positive, and its dollar-based net retention rate -- which gauges year over year revenue growth per existing customer -- remains above 150%. If Figma can maintain those hypergrowth rates for a few more years, it could significantly boost Adobe's revenue and earnings.

Adobe CEO Shantanu Narayen, who led the company through the difficult transformation of its desktop software into cloud-based services over the past decade, also isn't known for making reckless acquisitions. Therefore, it might be smarter for investors to see how the Figma deal plays out before dismissing it as a desperate bid to boost near-term growth.

Lastly, Adobe's stock looks reasonably valued relative to its peers. At $340 per share, it trades at just 22 times its adjusted EPS forecast for fiscal 2023. For reference, Microsoft and Autodesk --  which are growing at rates comparable to Adobe -- trade at 22 and 26 times forward earnings, respectively.

Which argument makes more sense?

I believe Adobe's stock got overheated last year when it hit its all-time high of $688.37 last November. But now that that froth has been wiped away, it looks more attractive. Without Figma, it's still an evergreen tech stock that specializes in industry-standard and mission-critical cloud services. With Figma, the growth of its core Creative Cloud business could significantly accelerate over the long term.

Adobe's stock probably won't blast off as long as rising interest rates and sluggish economic growth drive investors away from the tech sector. But its downside potential is also limited at these valuations -- which suggests it's a golden opportunity for patient investors to jump back in.