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Adobe Systems (ADBE) closed at $430.59 in the latest trading session, marking a +1.43% move from the prior day. This change outpaced the S&P 500's 0.08% loss on the day. At the same time, the Dow lost 0.26%, and the tech-heavy Nasdaq gained 0.08%.
Prior to today's trading, shares of the software maker had gained 10.9% over the past month. This has lagged the Computer and Technology sector's gain of 12.38% and outpaced the S&P 500's gain of 8.78% in that time.
Investors will be hoping for strength from Adobe Systems as it approaches its next earnings release. The company is expected to report EPS of $3.33, up 7.07% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.44 billion, up 12.71% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $13.51 per share and revenue of $17.68 billion, which would represent changes of +8.25% and +12.03%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Adobe Systems. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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 remained stagnant. Adobe Systems currently has a Zacks Rank of #3 (Hold).
In terms of valuation, Adobe Systems is currently trading at a Forward P/E ratio of 31.43. This represents a premium compared to its industry's average Forward P/E of 30.37.
Investors should also note that ADBE has a PEG ratio of 1.9 right now. 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. Computer - Software stocks are, on average, holding a PEG ratio of 2.19 based on yesterday's closing prices.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 164, which puts it in the bottom 35% 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.
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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