Adobe Systems (ADBE) Gains As Market Dips: What You Should Know
Adobe Systems (ADBE) closed at $663.22 in the latest trading session, marking a +0.28% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.13%.
Prior to today's trading, shares of the software maker had gained 6.38% over the past month. This has outpaced the Computer and Technology sector's gain of 4.3% and the S&P 500's gain of 2.07% in that time.
ADBE will be looking to display strength as it nears its next earnings release, which is expected to be September 21, 2021. The company is expected to report EPS of $3, up 16.73% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.88 billion, up 20.32% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $12.21 per share and revenue of $15.65 billion, which would represent changes of +20.89% and +21.64%, respectively, from the prior year.
Any recent changes to analyst estimates for ADBE should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ADBE is currently a Zacks Rank #3 (Hold).
Digging into valuation, ADBE currently has a Forward P/E ratio of 54.19. For comparison, its industry has an average Forward P/E of 36.68, which means ADBE is trading at a premium to the group.
Investors should also note that ADBE has a PEG ratio of 2.89 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Computer - Software stocks are, on average, holding a PEG ratio of 3.09 based on yesterday's closing prices.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 165, putting it in the bottom 36% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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