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Adobe (ADBE) to Post Q2 Earnings: What's in the Offing?

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Adobe Inc. (ADBE - Free Report) is set to report second-quarter fiscal 2022 results on Jun 16.

For the fiscal second quarter, Adobe expects non-GAAP earnings of $3.30 per share. The Zacks Consensus Estimate for earnings is also pegged at $3.30 per share, indicating growth of 8.9% from the year-ago fiscal quarter’s reported figure.

Adobe projects total revenues of $4.34 billion. The consensus mark for the same is pegged at $4.34 billion, implying growth of 13.1% from the year-ago fiscal quarter’s reported figure.

ADBE’s bottom line surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 3.26%.

Adobe Inc. Price and EPS Surprise

Adobe Inc. Price and EPS Surprise

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

Factors to Consider

Adobe’s strong focus on its Digital Media business is likely to have aided its performance in the fiscal second quarter.

Growing demand for ADBE’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 fiscal quarter. For second-quarter fiscal 2022, Adobe expects revenue growth of 13% in Digital Media from the last fiscal year’s reading.

Rising momentum across the new platform called Creative Cloud Express, and strength across Substance 3D and the new 3D Modeler are expected to have aided growth in the Creative Cloud revenues in the fiscal quarter under review.

Further, solid enterprise adoption of Acrobat and Adobe Sign is expected to have driven growth in Document Cloud revenues in the to-be-reported fiscal quarter.

Apart from Digital Media, strong momentum across Adobe Experience Cloud on the heels of the rising uptake of Adobe Marketing Cloud, Adobe Analytics Cloud and Adobe Advertising Cloud is expected to have boosted the business in the fiscal quarter under review.

Moreover, cross-cloud integrations, product innovations and the growing adoption of Adobe Experience Manager might have been other positives.

ADBE expects the Digital Experience segment’s revenues to grow 15% from the year-ago fiscal quarter’s actuals. Also, Digital Experience subscription revenues are likely to increase 17% from the prior fiscal year’s quarterly level.

Additionally, increasing demand for data and insights, content and personalization, customer journey management, commerce and advertising is expected to have accelerated revenues in the fiscal second quarter.

However, the ongoing tensions between Russia and Ukraine due to which Adobe halted its all new sales of products and services in Russia and Belarus are expected to have been major headwinds during the fiscal quarter to be reported.

What Our Model Says

Our proven model does not conclusively predict an 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 #4 (Sell).

Stocks to Consider

Here are some stocks worth considering as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

ASGN (ASGN - Free Report) currently has a Zacks Rank #2 and n Earnings ESP of +1.30%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for ASGN’s second-quarter 2022 earnings is pegged at $1.67 per share, indicating a 26.5% rise from the year-ago quarter’s reported number.

Generac Holdings (GNRC - Free Report) has an Earnings ESP of +3.89% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for GNRC’s second-quarter 2022 earnings is pegged at $2.66 per share, suggesting an increase of 11.3% from the prior-year reported figure.

MSCI (MSCI - Free Report) has an Earnings ESP of +0.46% and a Zacks Rank #3 at present.

The Zacks Consensus Estimate for MSCI’s second-quarter 2022 earnings is pegged at $2.73 per share, suggesting an increase of 11.4% from the prior-year quarter’s reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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