Adobe Systems (ADBE) Stock Sinks As Market Gains: What You Should Know
Adobe Systems (ADBE) closed the most recent trading day at $665.16, moving -1.25% from the previous trading session. This change lagged the S&P 500's daily gain of 0.17%. Elsewhere, the Dow gained 0.55%, while the tech-heavy Nasdaq lost 0.4%.
Heading into today, shares of the software maker had gained 4.11% over the past month, lagging the Computer and Technology sector's gain of 4.39% and outpacing the S&P 500's gain of 3.19% in that time.
Adobe Systems will be looking to display strength as it nears its next earnings release. In that report, analysts expect Adobe Systems to post earnings of $3.18 per share. This would mark year-over-year growth of 13.17%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.08 billion, up 19.13% from the year-ago period.
ADBE's full-year Zacks Consensus Estimates are calling for earnings of $12.46 per share and revenue of $15.75 billion. These results would represent year-over-year changes of +23.37% and +22.42%, respectively.
Investors might also notice recent changes to analyst estimates for Adobe Systems. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.05% lower. Adobe Systems currently has a Zacks Rank of #4 (Sell).
Investors should also note Adobe Systems's current valuation metrics, including its Forward P/E ratio of 54.06. This valuation marks a premium compared to its industry's average Forward P/E of 37.12.
It is also worth noting that ADBE currently has a PEG ratio of 2.84. 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. The Computer - Software industry currently had an average PEG ratio of 2.99 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 109, putting it in the top 43% 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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