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

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Adobe Systems (ADBE) closed at $656.86 in the latest trading session, marking a +1.47% move from the prior day. This change outpaced the S&P 500's 0.85% gain on the day.

Heading into today, shares of the software maker had gained 3.43% over the past month, outpacing the Computer and Technology sector's gain of 3.07% and the S&P 500's gain of 2.85% in that time.

Wall Street will be looking for positivity from ADBE as it approaches its next earnings report date. This is expected to be September 21, 2021. The company is expected to report EPS of $3, up 16.73% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.88 billion, up 20.32% from the year-ago period.

ADBE's full-year Zacks Consensus Estimates are calling for earnings of $12.21 per share and revenue of $15.65 billion. These results would represent year-over-year changes of +20.89% and +21.64%, respectively.

Investors should also note any recent changes to analyst estimates for ADBE. Recent revisions tend to reflect the latest near-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. 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, 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. Within the past 30 days, our consensus EPS projection remained stagnant. ADBE currently has a Zacks Rank of #3 (Hold).

Digging into valuation, ADBE currently has a Forward P/E ratio of 53.04. For comparison, its industry has an average Forward P/E of 36.6, which means ADBE is trading at a premium to the group.

It is also worth noting that ADBE currently has a PEG ratio of 2.83. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Software industry currently had an average PEG ratio of 3.19 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 119, putting it in the top 47% 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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