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Adobe Systems (ADBE) Outpaces Stock Market Gains: What You Should Know

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Adobe Systems (ADBE - Free Report) closed the most recent trading day at $638.66, moving +0.99% from the previous trading session. This change outpaced the S&P 500's 0.3% gain on the day.

Coming into today, shares of the software maker had gained 1% in the past month. In that same time, the Computer and Technology sector gained 1.79%, while the S&P 500 gained 4.28%.

Investors will be hoping for strength from ADBE as it approaches its next earnings release. The company is expected to report EPS of $3.18, up 13.17% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.08 billion, up 19.17% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $12.46 per share and revenue of $15.75 billion, which would represent changes of +23.37% and +22.43%, respectively, from the prior 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. 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. 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.

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 2.39% 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 50.75. This valuation marks a premium compared to its industry's average Forward P/E of 37.41.

It is also worth noting that ADBE currently has a PEG ratio of 2.66. 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. The Computer - Software was holding an average PEG ratio of 3.06 at yesterday's closing price.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 169, which puts it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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