Adobe Systems (ADBE) ended the recent trading session at $327.35, demonstrating a -2.44% change from the preceding day's closing price. The stock's performance was behind the S&P 500's daily loss of 1.12%. Elsewhere, the Dow saw a downswing of 0.84%, while the tech-heavy Nasdaq depreciated by 1.9%.
Coming into today, shares of the software maker had lost 3.8% in the past month. In that same time, the Computer and Technology sector gained 3.58%, while the S&P 500 gained 1.26%.
The investment community will be closely monitoring the performance of Adobe Systems in its forthcoming earnings report. On that day, Adobe Systems is projected to report earnings of $5.39 per share, which would represent year-over-year growth of 12.06%. Simultaneously, our latest consensus estimate expects the revenue to be $6.1 billion, showing a 8.85% escalation compared to the year-ago quarter.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $20.77 per share and a revenue of $23.67 billion, signifying shifts of +12.76% and +10.06%, respectively, from the last year.
It is also important to note the recent changes to analyst estimates for Adobe Systems. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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. The Zacks Consensus EPS estimate remained stagnant within the past month. Right now, Adobe Systems possesses a Zacks Rank of #3 (Hold).
With respect to valuation, Adobe Systems is currently being traded at a Forward P/E ratio of 16.15. For comparison, its industry has an average Forward P/E of 28.39, which means Adobe Systems is trading at a discount to the group.
Investors should also note that ADBE has a PEG ratio of 1.23 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Computer - Software industry was having an average PEG ratio of 1.8.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 39% 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.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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Adobe Inc. (ADBE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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