U.S. Markets closed

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

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Adobe Systems (ADBE) closed at $486.69 in the latest trading session, marking a -0.82% move from the prior day. This move lagged the S&P 500's daily gain of 0.07%.

Investors will be hoping for strength from ADBE as it approaches its next earnings release. In that report, analysts expect ADBE to post earnings of $2.81 per share. This would mark year-over-year growth of 14.69%. Our most recent consensus estimate is calling for quarterly revenue of $3.73 billion, up 19.31% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $11.88 per share and revenue of $15.46 billion, which would represent changes of +17.62% and +20.13%, respectively, from the prior year.

Any recent changes to analyst estimates for ADBE should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ADBE is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, ADBE is currently trading at a Forward P/E ratio of 41.3. Its industry sports an average Forward P/E of 38.6, so we one might conclude that ADBE is trading at a premium comparatively.

Also, we should mention that ADBE has a PEG ratio of 2.26. 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 2.36 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 159, which puts it in the bottom 38% 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.

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


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 Inc. (ADBE) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.