U.S. Markets closed

Adobe Systems (ADBE) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Adobe Systems (ADBE) closed the most recent trading day at $270.98, moving +0.47% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.41%. Elsewhere, the Dow gained 0.57%, while the tech-heavy Nasdaq added 0.7%.

Prior to today's trading, shares of the software maker had lost 4.97% over the past month. This has lagged the Computer and Technology sector's gain of 2.38% and the S&P 500's gain of 2.04% 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 $2.26, up 23.5% from the prior-year quarter. 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 help to show the ever-changing nature of near-term business trends. 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. 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.

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. The Zacks Consensus EPS estimate has moved 0.05% higher within the past month. ADBE is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that ADBE has a Forward P/E ratio of 34.41 right now. This valuation marks a premium compared to its industry's average Forward P/E of 28.73.

We can also see that ADBE currently has a PEG ratio of 2.12. 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 2.17 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 85, which puts it in the top 34% 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.

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


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Adobe Systems Incorporated (ADBE) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research