Adobe Systems (ADBE) closed the most recent trading day at $265.52, moving -1.38% from the previous trading session. This change lagged the S&P 500's 0.39% loss on the day. Elsewhere, the Dow lost 0.95%, while the tech-heavy Nasdaq lost 0.83%.
Coming into today, shares of the software maker had lost 4.27% in the past month. In that same time, the Computer and Technology sector gained 0.35%, while the S&P 500 lost 0.1%.
Wall Street will be looking for positivity from ADBE as it approaches its next earnings report date. In that report, analysts expect ADBE to post earnings of $2.26 per share. This would mark year-over-year growth of 23.5%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.97 billion, up 20.49% from the year-ago period.
ADBE's full-year Zacks Consensus Estimates are calling for earnings of $7.84 per share and revenue of $11.15 billion. These results would represent year-over-year changes of +15.98% and +23.49%, respectively.
It is also important to note the recent changes to analyst estimates for ADBE. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.01% higher. ADBE is currently a Zacks Rank #2 (Buy).
Digging into valuation, ADBE currently has a Forward P/E ratio of 34.35. Its industry sports an average Forward P/E of 27.57, so we one might conclude that ADBE is trading at a premium comparatively.
We can also see that ADBE currently has a PEG ratio of 2.11. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Software industry currently had an average PEG ratio of 2.18 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 81, putting it in the top 32% 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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