|Bid||0.00 x 1200|
|Ask||0.00 x 1100|
|Day's Range||275.30 - 283.05|
|52 Week Range||204.95 - 313.11|
|Beta (3Y Monthly)||1.10|
|PE Ratio (TTM)||52.87|
|Earnings Date||Sep 17, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||312.92|
Cloud software giant Adobe (ADBE) is set to report its third quarter results after the closing bell on Tuesday.
The Zacks Analyst Blog Highlights: Intel, Adobe Systems, Mondelez International, Morgan Stanley and Arista Networks
FedEx, Adobe Systems, General Mills, Darden Restaurants and Apple are part of Zacks Earnings Preview
Buy Adobe on weakness to its weekly value level and 200-day simple moving average, which are converged at $269.99 and $269.61. Declining weekly slow stochastics is a warning.
In the month of September, there has been a significant, sharp and quick shift out of momentum stocks -- which have been working all year long -- into value stocks -- which haven't been working for a long time. In this shift, no momentum stock has been spared, not even blue-chip cloud computing giant Adobe (NASDAQ:ADBE). In fact, over the past five years, ADBE stock has experienced a 10% correction only five times, which is very few for a momentum growth stock.Source: r.classen / Shutterstock.com Right now, ADBE stock is in the midst of one those 10% corrections. How did the other five corrections play out? With a big ADBE stock rebound, and huge gains in the long run.This will one play out in a similar fashion.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn the big picture, there's nothing wrong with momentum stocks or ADBE stock. Instead, investors are simply voicing confidence in the economy by booking profits on their momentum winners, and buying the dip in beaten up, economically sensitive stocks. Historically speaking, such a pivot has almost always happened right before big market rallies. Thus, zooming out, this shift out of momentum stocks will pass soon. When it does, it'll be replaced by a cyclical bull market rally in all stocks.With respect to ADBE stock, you still have a secular growth stock supported by favorable long-term trends, with big revenue growth rates, even bigger margins and an exceptional clarity to big profit growth in the long run. On top of all that, recent weakness has plunged ADBE stock into slightly undervalued territory -- a rarity for a secular winner.Net net, don't worry about the recent weakness in ADBE stock. It isn't indicative of much. Instead, embrace it, and use it to buy at a discount. The Fundamentals Are Rock SolidThe fundamentals underlying ADBE stock are about as good as it gets.Long story short, Adobe is the unchallenged leader in a secular growth market, with a robust track record of big revenue growth, a ton of runway to keep growing and sky-high margins that are only moving higher.Let's break this down. The digital media market is a secular growth one. There are three big secular trends here. One, everything is going digital -- consumers everywhere are spending more time on their phones, computers and tablets than ever before. Two, everything is going visual -- an increasing amount of time spent in the digital channel is spent with visually focused apps, such as Instagram, YouTube, Snapchat, etc. Three, consumers and enterprises alike are increasingly producing and sharing digital media content.The result? A secular rise in consumer and enterprise demand for digital media and marketing products. This secular rise has powered consistent 20%-plus revenue growth at Adobe over the past several years.This big growth streak has a lot of runway left. When you combine all of Adobe's verticals -- ranging from helping consumers create movies, to helping businesses digitize their documents and workflows, to improving digital media campaigns for enterprises, the addressable market here is north of $100 billion. Adobe's revenues this year are expected at just over $11 billion. Thus, there's plenty of room for this big growth narrative to stay big.Perhaps most importantly, in this space, Adobe is first, and there's no close second. Because of this, the company commands tremendous pricing power over customers. This leads to big gross margins, which stand at nearly 90% today. They could go even higher with murmurs of another price hike on the way.Big picture -- Adobe stock has all the ingredients of a long-term winner. The Valuation Leaves Room for UpsideUsually, when a stock has all the ingredients of a long-term winner like Adobe stock, that stock persistently trades at a premium valuation because investors are willing to pay a premium for all those winning ingredients.That isn't the case today, and that means this is a rare opportunity to buy Adobe stock at a discount.The numbers here are easy to follow. Adobe has reported 20%-plus revenue growth in each of the past several years, and 25%-plus revenue growth each quarter this year. In other words, this is a big growth company whose growth momentum isn't slowing. Given the aforementioned secular trends supporting the digital media market and the $100 billion-plus addressable opportunity here, I don't see Adobe's top-line momentum slowing much into the foreseeable future.Nor do analysts.Consensus Street estimates call for 24% revenue growth this year, 18% revenue growth next year and 15% revenue growth in 2021. Into 2025, revenue growth should realistically remain north of 10%, putting revenues on a visible pathway toward $25 billion by 2025, from $9 billion in 2018.Gross margins are around 88%. They should inch towards 90% thanks to gradual price hikes. The opex rate hovers around 50%. It has room to fall towards 40% in the long run as revenues more than double over the next several years and big revenue growth drives positive operating leverage.Net net, Adobe could very reasonably turn into a 50% operating margin company by 2025 with revenues of about $25 billion. That combination makes $23 in earnings-per-share seem doable by then. Based on a growth stock average 21-times forward multiple and a 10% discount rate, that implies a 2019 price target of about $300 for ADBE stock. Bottom Line on ADBE StockAdobe stock is down 10% over the past few weeks. But, there's nothing wrong with Adobe stock. The fundamentals remain strong, the valuation remains reasonable, and the optics remain favorable.As such, this 10% selloff is nothing more than a small, normal and temporary correction in an otherwise still healthy long-term uptrend. What's the best thing to do with such temporary corrections? Buy the dip.As of this writing, Luke Lango was long ADBE. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post The 2 Big Reasons You Should Like Adobe Stock for the Long Haul appeared first on InvestorPlace.
Volatility is elevated as the S&P 500 stalls near historic highs, while the software industry is oddly not participating in the recent rebound.
Software stocks in the S&P 500 have fallen more than 4% since late July. Adobe results on Tuesday offer investors a chance to reassess the group.
“It was a game-changing acquisition for Adobe. It really put more fuel in the tank from a growth and product perspective,” an analyst tells the Business Journal.
Editor's note: InvestorPlace's Earnings Reports to Watch is updated weekly. Please check back next week for our latest earnings picks.Earnings season has ended, and once again, stocks have rallied. One might think that a lighter earnings calendar would be troublesome for stocks, given that news for U.S. corporations remains mostly positive. It hasn't played out that way.Indeed, stocks began to gain in early June once earnings reports had slowed to a trickle. The S&P 500 then turned south in late July -- at the peak of earnings season. Last week, with reports for major companies pretty much complete, U.S. equities again bounced: as of this writing, the S&P 500 is back above 3,000.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIt has been an odd trend, but one that suggests the rally in stocks has at least a month to go. Interestingly, the earnings calendar does give investors a chance to check that thesis next week.There actually are several key companies reporting next week that will give data on key areas of the economy and the market. Darden Restaurants (NYSE:DRI) can give a read on the confidence of the consumers who are supporting the economy. Results from office furniture manufacturers Herman Miller (NASDAQ:MLHR) and Steelcase (NYSE:SCS) should show confidence on the business side. Reaction to the second-quarter report from Chewy (NYSE:CHWY) will highlight investor attitudes toward, and patience with, newer IPO stocks, some of which have struggled. * 10 Recession-Resistant Services Stocks to Buy But three earnings reports next week look even more helpful in trying to judge investor sentiment at the moment. A classic tech growth stock will get another challenge. An economic bellwhether delivers an always-important release. And a consumer leader will update on the progress of its turnaround in an industry that has seen some trouble. For investors trying to figure out if history will repeat itself, these are the three earnings reports to watch now. FedEx (FDX)Source: Mike Mozart via FlickrEarnings Report Date: Tuesday, September 17, after market closeEarnings from FedEx (NYSE:FDX) historically have been seen as a proxy for corporate sentiment. After all, FedEx revenue was pretty much directly linked to U.S. business spending. Strong results from FedEx usually meant confident executives and a positive macroeconomic outlook.FedEx doesn't quite have the status it used to, but its report still matters. FedEx management actually has been bearish in recent quarters, owing in large part to trade war issues. With the domestic economy still strong, management might have different news to deliver this time around. And a bullish stance from FedEx could be enough of a catalyst to give U.S. equities a further boost.Meanwhile, the quarter is a key one for FDX stock itself. FDX shares have been stuck in a range since December. They're down over one-third from early 2018 highs. Investors are worried about pending competition from Amazon (NASDAQ:AMZN) and a potential cyclical turn. For a rally into earnings to hold, FedEx needs to put up a strong quarter and inspire some confidence from investors in itself. Adobe (ADBE)Source: r.classen / Shutterstock.com Earnings Report Date: Tuesday, September 17, after market closeAdobe (NASDAQ:ADBE) seemed to get the benefit of the doubt after its fiscal second-quarter report in June. The combination of soft guidance and a high valuation often sends a stock tumbling, but ADBE actually rose after the report, and kept climbing.In a seeming reversal of the market-wide trend, it's been a lack of news that's been trouble for Adobe stock since. ADBE has pulled back 11% from late July highs, and heads into earnings near a three-month low. * 7 Tech Stocks You Should Avoid Now With that pullback, Adobe stock looks more intriguing at 28x forward earnings. But at that multiple, and with growth likely to slow at some point, ADBE still has valuation concerns. That makes earnings an interesting test. Does a strong earnings report lead Adobe stock to rebound? If the answer is no, that suggests valuation is becoming a more important factor in the cloud space. That would make Adobe earnings an omen for other stocks across tech. General Mills (GIS)Source: Shutterstock Earnings Report Date: Wednesday, September 18, before market openEarnings from General Mills (NYSE:GIS), too, will impact entire sectors. GIS stock was collapsing less than a year ago, but increasing investor optimism toward its turnaround, and its pivot into pet food, has led to strong performance in 2019.It's important to the industry that General Mills keep performing with its fiscal Q1 report on Wednesday morning. After it looked last year like the consumer packaged goods space was in trouble, many stocks have rallied. There's a growing belief that the industry can adapt to competition from smaller, focused brands -- and from private label rivals being backed by supermarket customers.General Mills numbers need to be good enough to keep that confidence intact. This is a stock up 39% so far this year in a sector that, with a few exceptions, generally has rallied. Investors clearly are pricing in better news going forward. If General Mills can't deliver, there's a long way down to go.As of this writing, Vince Martin did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post 3 Earnings Reports to Watch Next Week appeared first on InvestorPlace.
Adobe today announced it will webcast its third quarter fiscal year 2019 earnings conference call to be held on Tuesday, Sept. 17, 2019.
Adobe (ADBE) today announced the next milestone in its commitment to maintaining an inclusive workplace and ensuring fair employment practices across gender and U.S. racial and ethnic groups, by disclosing findings from its opportunity parity initiative and reaffirming global gender pay parity. Early this year, Adobe declared its plan to pursue a new initiative it calls opportunity parity, examining fairness in promotions across demographic groups. In the U.S., the promotion rate was 13.5% for white employees and 13.2% for non-white employees.
Even the best software stocks can get beat up as bearish investors pounce on stock market volatility. High-revenue-growth companies specializing in software-as-a-service may outperform.
Terrifying and quick-to-counter terrific headline tweets are no way to buy or sell tech stocks. In today's often volatile market, trusting the price charts of Adobe (NASDAQ:ADBE), Twilio (NYSE:TWLO) and Shopify (NYSE:SHOP) and applying smart trading strategies to those decisions is the only way to navigate and profit in a daily and ongoing trade war. Let me explain.August was undoubtedly a tough one for the market and even more so for many technology stocks. For a time and in the first part of the month, countering trade war jabs from the U.S. and China and an inverted-yield curve got the better of Wall Street. And let's just say, conditions turned quickly ugly on the price charts of most risk-assets.But given the medium of Twitter and unusual negotiating skill set of POTUS, taking any particular day's headline and message to the market as written in stone is a fool's game. And by the second half of August, Wall Street was already picking up the pieces. On Aug. 13 the broader indices quietly scored a bullish and historically robust follow through day amid still chaotic headlines and uncertain political theater.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Battered Tech Stocks to Buy Now At the end of the day, investors have to ask themselves if it's better to react to the loose cannon in charge or proactively listen and watch the price charts for clues to what the future holds. When it comes to tech stocks ADBE, TWLO and SHOP, the decision of whether to buy or short shares is an easy one. Tech Stocks to Buy: Adobe (ADBE)Adobe is a large cap, household name that has been around nearly as long as Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL). And right now the ever-popular software graphics powerhouse is setting up as a buy.On the weekly price chart, shares of Adobe are testing prior pattern resistance and the 38% level for support as stochastics sets up in oversold territory with a bullish crossover signal.My suggestion is to allow for a bit of price confirmation on the weekly time frame before buying ADBE stock. As we move into the second half of the trading week, a move through $285 with an initial stop-loss of 5% looks about right, without waiting on a picture-perfect entry. Twilio (TWLO)Twilio is sending a loud and clear message to short shares on the weekly price chart. The in-app communications specialist is a high-profile growth play. Still, as any seasoned investor knows, even the best stocks go through corrections from time to time. Right now appears to be one of those periods. * 7 Strong-Buy Stocks Hedge Funds Are Buying Now Currently TWLO stock has broken below bear flag support this week. Shares are slightly oversold as evidenced by Twilio's stochastics and price action pressed into the lower Bollinger Band. As such, I'd wait for a small counter-trend rally before positioning. More importantly, given this tech stock's bullish run over the past two years, its troublesome failure through trendline support and its wide Fibonacci zone that's still untested, this one is a short! Shopify (SHOP)I'm a buyer of cloud-based business solutions platform Shopify, but only if today's price support holds. The weekly chart shows SHOP stock is challenging trendline support and prior pattern resistance tied to a high-level corrective base.Ultimately and similar to TWLO, Fibonacci support still isn't in play and that's obviously a concern. As stated above, all stocks, even a great growth story like Shopify, is bound to have periods of bearish price action which will test bulls' mettle. And given this technology stock's impressive rally in 2019, that point is all the more important to prepare for.Given the potential for more impactful and not necessarily benign volatility, I'd advise using the SHOP stock daily chart. The lesser time frame shows a bullish stochastics crossover in oversold territory as weekly technical support is being tested. If necessary, exiting below this week's lows if shares fall beneath $333 makes good sense both off and on the price chart.Disclosure: Investment accounts under Christopher Tyler's management do not currently own positions in securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post 3 Tech Stocks to Buy and Short appeared first on InvestorPlace.
The back and forth in the current market could be caused by several different issues. Besides trade and falling profits, one important concern is psychological -- investors are worried about a repeat of the 2018 bear market that kicked off this same time last year.We aren't usually much for "seasonality" or seasonal investing, but fears of a third or fourth quarter decline probably still have traders temporarily on edge. As a result, we want to earn income on our long stock position in Adobe (NASDAQ:ADBE), which we've been managing since our ADBE August 9th $302.50 Put Write expired in the money.Rather than branch out into new positions on new stocks, we can sell a covered call on ADBE and collect income while we wait for the rest of the market to settle.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Waiting on the European Central Bank A renewed rally in the major indexes would likely push ADBE higher, but the European Central Bank's (ECB) announcement on Thursday is our focus right now. The chair of the ECB will host a press conference following the central bank's interest rate decision this Thursday.Any signs the ECB will step the in to market with more stimulus should help ADBE find support now that it has broken below $280. The ECB's announcement could even send ADBE's price slightly higher in the short term.While it may sound odd to suggest the ECB will affect ADBE's short-term prospects, the health of the European Union is very important to ADBE's growth rates.ADBE provides software services to businesses all over the world, and any relief for the European economy could stimulate business growth. If the ECB announces new rounds of easing, business spending could pick up, and ADBE could see subscription growth.That growth would benefit our long stock position in both the short and long term, and it's one of the reasons we think now is a good time to trade on ADBE. Stuck in a Tight Range Like most tech stocks, ADBE has been stuck in a tight range. Trade and interest rate volatility have kept new buyers from stepping into the stock, pushing the stock lower.While that isn't great for our long stock position, it does present us a good opportunity to sell covered calls against ADBE for more income.Daily Chart of Adobe Systems, Inc. (ADBE) -- Chart Source: TradingViewADBE made lower highs throughout August, and its next down-trending resistance level is at around $290. Since we are selling a covered call, we want to choose a strike price that ADBE is unlikely to cross.We think that, even with the potential boost from easing in Europe, ADBE will stay below the $290 in the short term. If it does, we can sell another covered call for more income while we wait for ADBE to rise above $302.50, the original price we purchased it for.To find out which ADBE covered calls we're selling--and to get access to our full portfolio of income-generating trades--sign up for a risk-free trial of Strategic Trader today.InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of Strategic Trader.The post The ECB's Announcement Could Boost Adobe appeared first on InvestorPlace.
Undoubtedly, cloud services companies like Okta (NASDAQ:OKTA) offer the most relevant products and platforms. With more organizations taking advantage of the connectivity and cost efficiencies that cloud functions provide, OKTA stock has witnessed a surge in buying interest.Source: Sundry Photography / Shutterstock.com That said, the industry is still relatively in its infancy. While early leaders like Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) have emerged to take the lead, there's no guarantee that they'll keep it. Technology is always in flux, and demand -- or lack thereof -- can change on a dime.Previously, this circumstance has benefited Okta stock. But recently, Wall Street has apparently take a dim view on the cloud and various tech names. On Monday, OKTA stock dropped nearly 10%. That made it one of the worst performers of the day.InvestorPlace - Stock Market News, Stock Advice & Trading Tips What Happened to OKTA Stock?Naturally, whenever we see a massive hemorrhaging in the markets, we want (or demand) an explanation. In most cases, the answer is apparent: A company flubbed an earnings report or the industry faces a decimation in revenue-making opportunities. * 7 Stocks to Buy In a Flat Market But with Okta stock, none of these things apply. For one thing, shares have absolutely skyrocketed this year. Even with Monday's market erosion, OKTA is up almost 73%. That, my friends, is what we call resiliency.It also points to the fact that, up until at least recently, investors believed in the narrative for OKTA stock. A quick rundown of their client list reads like a "who's who" of major industry players. For example, we're talking about names like JetBlue Airways (NASDAQ:JBLU), Adobe (NASDAQ:ADBE), and Western Union (NYSE:WU).Fundamentally Okta stock is on the up and up. About two weeks ago, OKTA released its earnings report for the second quarter of fiscal 2020. As a bull, the company provided exactly what you could hope to expect. On the profitability front, the company narrowed an expected loss of 10 cents per share to a loss of 5 cents. On the top line, OKTA rang up $140.5 million, easily surpassing the consensus estimate of $131 million.Yet OKTA stock dropped on the financial disclosure, puzzling many onlookers. Curiously, shares never really recovered. For those hoping that Monday would provide a fresh spark, they were obviously badly disappointed.Worst of all, no one knows why. However, peer-to-peer comparisons offer some clues. For example, several rivals, including Twilio (NYSE:TWLO) incurred double-digit losses on Monday. Although it's speculation, investors may be rotating out of tech plays and into what are perceived as safer opportunities. Portfolio Shifting May Have Hurt OKTA StockIn the absence of a better explanation, investors probably shifted their exposure to safer bets. This in turn created, and then later amplified, volatility in OKTA stock.First, while the cloud services company's bulls have lauded its growth trajectory, I must bring up the counterargument: The robustness of that growth has declined significantly in magnitude.For example, back in Q1 of calendar 2017, OKTA generated $49.3 million, which was good for an 82% lift from the year-ago quarter. In the most recent earnings report, the year-over-year lift was comparatively small at 48.5%. With the exception of a few quarters, the sales growth rate has consistently declined between Q1 2017 to Q2 2019.Ordinarily, that shouldn't cause panic. Because of the law of small numbers, it is increasingly difficult to sustain outrageously high growth rates as the nominal revenues get bigger. However, OKTA's quarterly revenue is now $140 million, which isn't that big compared to its market capitalization of $13 billion. Thus, investors might be freaked out about the rich premium on Okta stock.A second point to consider is which names jumped on Monday. I can't help but notice that energy-related names, like Helmerich and Payne (NYSE:HP) and National Oilwell Varco (NYSE:NOV) outperformed. Perhaps with the noise President Donald Trump's administration has been making geopolitically, investors see value in recently undervalued companies. How to Approach OKTAOverall, I have reservations about engaging a technically overheated play like OKTA stock. Even with Monday's decline, I still have these reservations.Irrespective of your opinion about Okta stock, we must respect that the markets severely penalized it. With the volatility, shares are now sandwiched in between the 50-day moving average and the 200-day moving average. It's currently straddling an area of weak support, suggesting further volatility.For conservative investors, I'd stay away for now. If on the other hand you're bullish on OKTA, you might enjoy this discount. Still, my bet is that a deeper discount lies ahead for those who wait.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 3 Artificial Intelligence Stocks to Buy * 7 Industrial Stocks to Buy for a Strong U.S. Economy * 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term The post Donat Try to Catch Okta Stock's Falling Knives appeared first on InvestorPlace.