In the latest trading session, Adobe Systems (ADBE) closed at $275.45, marking a -1.57% move from the previous day. This change lagged the S&P 500's 0.68% loss on the day. At the same time, the Dow lost 0.33%, and the tech-heavy Nasdaq lost 1.46%.
Prior to today's trading, shares of the software maker had gained 3.43% over the past month. This has outpaced the Computer and Technology sector's loss of 3.33% and the S&P 500's loss of 1.19% in that time.
Wall Street will be looking for positivity from ADBE as it approaches its next earnings report date. The company is expected to report EPS of $1.78, up 7.23% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.70 billion, up 22.99% from the year-ago period.
ADBE's full-year Zacks Consensus Estimates are calling for earnings of $7.81 per share and revenue of $11.15 billion. These results would represent year-over-year changes of +15.53% and +23.45%, respectively.
Any recent changes to analyst estimates for ADBE should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ADBE is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, ADBE currently has a Forward P/E ratio of 35.81. This valuation marks a premium compared to its industry's average Forward P/E of 31.54.
It is also worth noting that ADBE currently has a PEG ratio of 2.18. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computer - Software was holding an average PEG ratio of 2.25 at yesterday's closing price.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 82, which puts it in the top 33% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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