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Adobe Systems (ADBE) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Adobe Systems (ADBE - Free Report) closed at $482.74, marking a -0.79% move from the previous day. This change lagged the S&P 500's daily loss of 0.25%.

Coming into today, shares of the software maker had lost 7.01% in the past month. In that same time, the Computer and Technology sector lost 3.03%, while the S&P 500 gained 1.26%.

Wall Street will be looking for positivity from ADBE as it approaches its next earnings report date. In that report, analysts expect ADBE to post earnings of $2.81 per share. This would mark year-over-year growth of 14.69%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.73 billion, up 19.31% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.88 per share and revenue of $15.49 billion. These totals would mark changes of +17.62% and +20.4%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for ADBE. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for 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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.02% higher. ADBE is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, ADBE is holding a Forward P/E ratio of 40.94. This valuation marks a premium compared to its industry's average Forward P/E of 35.72.

We can also see that ADBE currently has a PEG ratio of 2.24. 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. Computer - Software stocks are, on average, holding a PEG ratio of 2.35 based on yesterday's closing prices.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 165, putting it in the bottom 36% 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.

To follow ADBE in the coming trading sessions, be sure to utilize Zacks.com.


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