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

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Adobe Systems (ADBE - Free Report) closed at $629.22 in the latest trading session, marking a -0.34% move from the prior day. This change lagged the S&P 500's 0.09% loss on the day.

Coming into today, shares of the software maker had gained 4.45% in the past month. In that same time, the Computer and Technology sector gained 2.73%, while the S&P 500 gained 2.28%.

Wall Street will be looking for positivity from ADBE as it approaches its next earnings report date. On that day, ADBE is projected to report earnings of $3 per share, which would represent year-over-year growth of 16.73%. Our most recent consensus estimate is calling for quarterly revenue 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.

Investors might also notice recent changes to analyst estimates for ADBE. Recent revisions tend to reflect the latest near-term business trends. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 51.73. For comparison, its industry has an average Forward P/E of 34.07, which means ADBE is trading at a premium to the group.

We can also see that ADBE currently has a PEG ratio of 2.76. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ADBE's industry had an average PEG ratio of 2.76 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 117, putting it in the top 47% 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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