Adobe Systems (ADBE) ended the recent trading session at $299.62, demonstrating a +1.83% change from the preceding day's closing price. The stock's change was more than the S&P 500's daily gain of 0.55%. Elsewhere, the Dow saw an upswing of 0.63%, while the tech-heavy Nasdaq appreciated by 0.91%.
The stock of software maker has fallen by 16.64% in the past month, lagging the Computer and Technology sector's gain of 0.04% and the S&P 500's gain of 0.71%.
The upcoming earnings release of Adobe Systems will be of great interest to investors. The company is predicted to post an EPS of $5.88, indicating a 15.75% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $6.28 billion, showing a 9.88% escalation compared to the year-ago quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $23.44 per share and revenue of $26.03 billion. These totals would mark changes of +11.94% and +9.5%, respectively, from last year.
Any recent changes to analyst estimates for Adobe Systems should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.01% lower. Currently, Adobe Systems is carrying a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Adobe Systems has a Forward P/E ratio of 12.55 right now. This signifies a discount in comparison to the average Forward P/E of 21.11 for its industry.
It's also important to note that ADBE currently trades at a PEG ratio of 0.94. 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 average PEG ratio for the Computer - Software industry stood at 1.65 at the close of the market yesterday.
The Computer - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 67, placing it within the top 28% of over 250 industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding 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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