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Adobe (ADBE) to Report Q2 Earnings: What's in the Cards?

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Adobe Inc. (ADBE - Free Report) is set to report fiscal second-quarter 2021 results on Jun 17.

For the fiscal second quarter, the company expects non-GAAP earnings of $2.81 per share. The Zacks Consensus Estimate for earnings is pegged at $2.81 per share, indicating a growth of 14.7% from the year-ago reported figure.

Further, the company projects total revenues of $3.72 billion. The consensus mark for the same is pegged at $3.73 billion, implying growth of 19.3% from the year-ago reported figure.

The company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the earnings surprise being 7.48%, on average.

Adobe Inc. Price and EPS Surprise

 

Adobe Inc. Price and EPS Surprise

Adobe Inc. price-eps-surprise | Adobe Inc. Quote

Factors to Consider

The company’s strong focus on its Digital Media business is likely to have contributed well to the fiscal second-quarter performance.

The growing demand for the company’s Digital Media Solutions along with solid momentum across Creative Cloud and Document Cloud is expected to have benefited the Digital Media business in the to-be-reported quarter.

Moreover, the rising adoption of enterprise services and net new subscriptions are expected tohave been positives.

Further, deepening focus on education is likely to have driven the company’s Creative annualized recurring revenues (ARR) in the quarter under review. Additionally, increased demand for professional video products, given strong engagement for Adobe Premiere Pro and After Effects, is expected to have driven creative revenues.

Furthermore, solid enterprise adoption of Acrobat and Document Cloud services is anticipated tohave driven growth in Document Cloud ARR.

Apart from Digital Media, Adobe’s strength in the Digital Marketing business is expected to have continued driving its top-line growth in the soon-to-be-reported quarter.

Strong momentum across Adobe Experience Cloud on the heels of the rising adoption of Adobe Marketing Cloud, Adobe Analytics Cloud and Adobe Advertising Cloudis expected tohave benefited the business in the quarter under review.

The rising work-from-home trend is expected to have led to a further surge in demand for digital documents. Additionally, increasing demand for data and insights, content and personalization, customer journey management, commerce, and advertising are expected to have accelerated revenues in the fiscal second quarter.

What Our Model Says

Our proven model does not conclusively predictan earnings beat for Adobe this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Adobe has an Earnings ESP of 0.00% and a Zacks Rank #3.

Stocks to Consider

Here are some stocks to consider as our model shows that these have the right combination of elements to beat on earnings this time around.

FedEx Corporation (FDX - Free Report) has an Earnings ESP of +2.78% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

General Mills, Inc. (GIS - Free Report) currently has an Earnings ESP of +2.06% and a Zacks Rank of 3.

CarMax, Inc. (KMX - Free Report) presently has an Earnings ESP of +5.00% and a Zacks Rank of 3.

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