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Adobe Systems (ADBE) Gains But Lags Market: What You Should Know

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Adobe Systems (ADBE - Free Report) closed at $621.28 in the latest trading session, marking a +0.41% move from the prior day. This move lagged the S&P 500's daily gain of 0.82%.

Heading into today, shares of the software maker had gained 4.33% over the past month, outpacing the Computer and Technology sector's gain of 1.98% and the S&P 500's gain of 0.89% in that time.

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 $3 per share. This would mark year-over-year growth of 16.73%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.88 billion, up 20.32% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $12.21 per share and revenue of $15.65 billion, which would represent changes of +20.89% and +21.64%, 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. 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.

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 remained stagnant. ADBE currently has a Zacks Rank of #3 (Hold).

In terms of valuation, ADBE is currently trading at a Forward P/E ratio of 50.7. Its industry sports an average Forward P/E of 33.11, so we one might conclude that ADBE is trading at a premium comparatively.

Investors should also note that ADBE has a PEG ratio of 2.7 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 2.7 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 82, which puts it in the top 33% 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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