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Adobe Systems (ADBE) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 min read

Adobe Systems (ADBE) closed at $496.47 in the latest trading session, marking a +1.9% move from the prior day. This change lagged the S&P 500's 1.95% gain on the day. Meanwhile, the Dow gained 1.95%, and the Nasdaq, a tech-heavy index, added 2.59%.

Prior to today's trading, shares of the software maker had lost 1.2% over the past month. This has lagged the Computer and Technology sector's gain of 5.64% and the S&P 500's gain of 2.89% in that time.

Wall Street will be looking for positivity from ADBE as it approaches its next earnings report date. On that day, ADBE is projected to report earnings of $2.65 per share, which would represent year-over-year growth of 15.72%. Meanwhile, our latest consensus estimate is calling for revenue of $3.36 billion, up 12.33% from the prior-year quarter.

ADBE's full-year Zacks Consensus Estimates are calling for earnings of $9.94 per share and revenue of $12.79 billion. These results would represent year-over-year changes of +26.3% and +14.51%, respectively.

Investors should also note any recent changes to analyst estimates for ADBE. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection has moved 0.28% higher. ADBE currently has a Zacks Rank of #3 (Hold).

In terms of valuation, ADBE is currently trading at a Forward P/E ratio of 49.01. This represents a premium compared to its industry's average Forward P/E of 32.68.

It is also worth noting that ADBE currently has a PEG ratio of 2.58. 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 2.42 at yesterday's closing price.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 161, putting it in the bottom 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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