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

Zacks Equity Research
·3 mins read

Adobe Systems (ADBE) closed at $502.82 in the latest trading session, marking a +0.33% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.01%. Meanwhile, the Dow gained 0.39%, and the Nasdaq, a tech-heavy index, lost 0.36%.

Prior to today's trading, shares of the software maker had gained 5.66% over the past month. This has outpaced the Computer and Technology sector's gain of 4.31% and the S&P 500's gain of 2.55% in that time.

Wall Street will be looking for positivity from ADBE as it approaches its next earnings report date. On that day, ADBE is projected to report earnings of $2.65 per share, which would represent year-over-year growth of 15.72%. Our most recent consensus estimate is calling for quarterly revenue of $3.36 billion, up 12.33% from the year-ago period.

ADBE's full-year Zacks Consensus Estimates are calling for earnings of $9.94 per share and revenue of $12.79 billion. These results would represent year-over-year changes of +26.3% and +14.51%, respectively.

Investors should also note any recent changes to analyst estimates for ADBE. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection has moved 0.99% higher. ADBE is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, ADBE is holding a Forward P/E ratio of 50.41. This represents a premium compared to its industry's average Forward P/E of 34.53.

We can also see that ADBE currently has a PEG ratio of 2.65. 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. The Computer - Software was holding an average PEG ratio of 2.72 at yesterday's closing price.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 80, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

To follow ADBE in the coming trading sessions, be sure to utilize Zacks.com.


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