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Adobe Systems (ADBE) Gains As Market Dips: What You Should Know

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Adobe Systems (ADBE - Free Report) closed at $219.73 in the latest trading session, marking a +0.02% move from the prior day. This move outpaced the S&P 500's daily loss of 1.82%. At the same time, the Dow lost 2.21%, and the tech-heavy Nasdaq lost 1.7%.

Coming into today, shares of the software maker had lost 12.5% in the past month. In that same time, the Computer and Technology sector lost 5.96%, while the S&P 500 lost 2.57%.

Investors will be hoping for strength from ADBE as it approaches its next earnings release, which is expected to be December 13, 2018. In that report, analysts expect ADBE to post earnings of $1.88 per share. This would mark year-over-year growth of 49.21%. Our most recent consensus estimate is calling for quarterly revenue of $2.42 billion, up 20.8% from the year-ago period.

ADBE's full-year Zacks Consensus Estimates are calling for earnings of $6.80 per share and revenue of $8.99 billion. These results would represent year-over-year changes of +57.77% and +23.11%, respectively.

Any recent changes to analyst estimates for ADBE should also be noted by investors. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. ADBE is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, ADBE is holding a Forward P/E ratio of 32.31. This valuation marks a premium compared to its industry's average Forward P/E of 30.76.

Investors should also note that ADBE has a PEG ratio of 1.97 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. ADBE's industry had an average PEG ratio of 1.97 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 92, which puts it in the top 36% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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