Adobe Systems (ADBE) closed at $318.03 in the latest trading session, marking a -1.98% move from the prior day. The stock's performance was behind the S&P 500's daily gain of 0.38%. Elsewhere, the Dow gained 0.1%, while the tech-heavy Nasdaq added 0.59%.
The software maker's stock has dropped by 9.25% in the past month, falling short of the Computer and Technology sector's loss of 1.1% and the S&P 500's loss of 0.64%.
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%. Meanwhile, the latest consensus estimate predicts the revenue to be $6.1 billion, indicating a 8.85% increase compared to the same quarter of the previous year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $20.77 per share and revenue of $23.67 billion, which would represent changes of +12.76% and +10.06%, respectively, from the prior year.
Investors should also take note of any recent adjustments to analyst estimates for Adobe Systems. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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 has moved 0.04% lower within the past month. Adobe Systems currently has a Zacks Rank of #3 (Hold).
From a valuation perspective, Adobe Systems is currently exchanging hands at a Forward P/E ratio of 15.62. This signifies a discount in comparison to the average Forward P/E of 22.19 for its industry.
One should further note that ADBE currently holds a PEG ratio of 1.1. 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. As of the close of trade yesterday, the Computer - Software industry held an average PEG ratio of 1.8.
The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 58, positioning it in the top 24% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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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Adobe Inc. (ADBE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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