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Adobe stock gets the nod in today's IBD 50 Stocks To Watch as it sets up in a new base with a growth story that's still very much intact.

Adobe (ADBE) continues to deliver impressive growth for a company with a market capitalization of nearly $141 billion. Its five-year annualized earnings growth rate is 46%, with a sales growth rate of 22%.

CEO Shantanu Narayen shook things up when he took over reins in 2007. Initially, his focus was on digital media and marketing services, but he was also instrumental in Adobe's transformation into a full-service enterprise cloud provider.

In 2013, Adobe released Creative Cloud to take the place of Creative Suite, a group of graphic design, video editing and web development applications. Instead of paying a one-time fee of $1,800, Creative Cloud was priced at $50/month or $19 a month for a single application.

Fast forward to today, and Adobe is widely viewed as one of the cloud leaders.

With a trailing price-to-earnings ratio of 39 and a forward P-E of 30, Adobe might seem like a pricey stock valuation-wise. But it's warranted due to a consistent record of strong earnings and sales growth.

The company's latest earnings report in September revealed another quarter of exceptional growth. Adjusted earnings rose 18% from the year-ago quarter. Sales rose 24% to $2.83 billion.

For its current fiscal year 2019, analysts are modeling profit of $7.84 a share, which would be up 16% from 2018. For 2020, look for growth to accelerate, up 24%.

Adobe's next earnings report is due next month, on or around Dec. 12. According to Zacks, look for adjusted profit to be up 23.5% to $2.26 a share. Look for sales to increase nearly 21% to $2.97 billion.

Adobe gapped about its 50-day moving average on Nov. 5, rising 4% in heavy volume. At its annual design conference, Adobe introduced Photoshop for iPad, the Fresco drawing app for Windows and an AI-powered Photoshop cameraapp for smartphones.

Currently, Adobe stock is forming a shallow cup base with a buy point for now of 313.21, 10 cents above its July 19 intraday high.

But an earlier entry could be seen if Adobe forms a handle area, where the last remaining sellers get shaken out of stock in preparation for a breakout attempt. An idea handle shows a gentle pullback in light volume.

Despite a huge price gain in recent years, Adobe's latest base is considered early stage. That's because a double-bottom pattern that formed in the second half of last year served to reset the base count.

Follow Ken Shreve on Twitter @IBD_Shreve for more stock market analysis and insight.

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Adobe Stock: Is The Cloud Computing Leader Ready For Another Leg Up? - Investor's Business Daily