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

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In the latest trading session, Adobe Systems (ADBE - Free Report) closed at $478.47, marking a +0.3% move from the previous day. This change outpaced the S&P 500's 0.46% loss on the day. Meanwhile, the Dow lost 0.91%, and the Nasdaq, a tech-heavy index, lost 0.06%.

Coming into today, shares of the software maker had gained 3.45% in the past month. In that same time, the Computer and Technology sector gained 7.04%, while the S&P 500 gained 7.53%.

Investors will be hoping for strength from ADBE as it approaches its next earnings release. In that report, analysts expect ADBE to post earnings of $2.65 per share. This would mark year-over-year growth of 15.72%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.36 billion, up 12.29% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.94 per share and revenue of $12.79 billion, which would represent changes of +26.3% and +14.51%, respectively, from the prior year.

Any recent changes to analyst estimates for ADBE should also be noted by investors. 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 company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.02% lower. ADBE is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, ADBE is currently trading at a Forward P/E ratio of 47.99. Its industry sports an average Forward P/E of 31.72, so we one might conclude that ADBE is trading at a premium comparatively.

It is also worth noting that ADBE currently has a PEG ratio of 2.53. 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. ADBE's industry had an average PEG ratio of 2.53 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 179, putting it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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