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Some big tech companies have been reporting some solid results of late.  The other day we saw a good quarter from Oracle (ORCL - Free Report) and now we get another good report from Adobe Systems (ADBE - Free Report) .

Last night after the close ADBE reported EPS of $0.78 when the Zacks Consensus Estimate was calling for $0.72.  That $0.06 beat translates into an 8.3% positive earnings surprise and it is the fourth straight beat of the Zacks Consensus Estimate.

Growth

I am a growth guy and just based on the size of the companies like ADBE and ORCL I would avoid them.  My thinking was that the best days were behind these names and growth would be very hard to come by.  I am adjusting my thinking on the big cap tech names.

Let’s look at the ADBE and specifically the topline. As a growth guy, I am much more interested in what is going up top than on the bottom line.  Don’t get me wrong, earnings are super important, but to me, I need to see what is causing the growth and why.

Follow Brian Bolan on Twitter: @BBolan1

ADBE Top Line

The topline number of $1.68B was better than the consensus estimate of $1.64B.  Now that is already what I want to see, but as I dug in deeper, I really liked what I saw.

Digital Media was $1.4B and that was well ahead of the $1.11B consensus estimate.

Digital Marketing was $501M, again ahead of the $487M estimate.

Print and Publishing came in just barely ahead of the consensus at $42M.

Seeing this brought a smile to my face. I love to see revenue come in ahead of the consensus.  But this next line item really stunned me.

Annualized Recurring Revenue was $4.25B compared to a consensus number of $4.21B and up from $3.98B in the prior quarter.

Analysts

Wunderlich Securities upped the stock to buy from hold and increased their target price to $145 from $115.  Analysts at Pivotal, Atlantic Equities, Cowen and Deutsche Bank all increased their target prices. Pivotal remains somewhat cautious on the stock as the maintained their hold rating and moved their target price to $109 from $104.  With the stock trading $127 and showing good revenue growth, that target price looks rather bearish to me.

52 Week High

Adobe traded as high as $130.30 today and that is a new 52 week high for the stock. The move higher by around $5 puts the 5-year run at roughly +$95 or 280%.  To me, this stock could easily see a similar run over the next five years as well.

Zacks Rank

Right now, ADBE is Zacks Rank #3 (Hold).  All the estimates aren’t in yet and when they do get in I would not be surprised to see this stock become a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy).