Adobe Systems (ADBE) Outpaces Stock Market Gains: What You Should Know
Adobe Systems (ADBE) closed at $410.12 in the latest trading session, marking a +1.64% move from the prior day. This change outpaced the S&P 500's 1.42% gain on the day. Meanwhile, the Dow gained 0.97%, and the Nasdaq, a tech-heavy index, lost 0.07%.
Heading into today, shares of the software maker had gained 10.23% over the past month, outpacing the Computer and Technology sector's gain of 6.64% and the S&P 500's gain of 6.69% in that time.
Wall Street will be looking for positivity from Adobe Systems as it approaches its next earnings report date. In that report, analysts expect Adobe Systems to post earnings of $3.33 per share. This would mark year-over-year growth of 7.07%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.44 billion, up 12.71% from the year-ago period.
ADBE's full-year Zacks Consensus Estimates are calling for earnings of $13.51 per share and revenue of $17.68 billion. These results would represent year-over-year changes of +8.25% and +12.03%, respectively.
Any recent changes to analyst estimates for Adobe Systems should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 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. The Zacks Consensus EPS estimate has moved 0.15% higher within the past month. Adobe Systems is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, Adobe Systems is currently trading at a Forward P/E ratio of 29.87. This valuation marks a premium compared to its industry's average Forward P/E of 27.44.
Meanwhile, ADBE's PEG ratio is currently 1.81. 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 2.33 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 138, putting it in the bottom 46% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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