Back to top

Image: Shutterstock

Adobe Q1 Preview: Can The Earnings Streak Continue?

Read MoreHide Full Article

As we look ahead to the 2023 Q1 season, one thing is sure – the 2022 Q4 season wasn’t nearly as bad as feared.

Many companies posted better-than-expected results, helping to keep the market afloat.

However, there are still some notable quarterly prints coming soon, including that from Adobe (ADBE - Free Report) .

Adobe is one of the biggest software companies in the world, generating the bulk of its revenue via licensing fees from its customers.

How does the company stack up heading into its quarterly print? Let’s take a closer look.

Key Metric

Investors should keep tabs on a critical metric: the company’s Subscription revenue.

For the quarter, the Zacks Consensus Estimate for Subscription revenue stands firm at $4.3 billion, indicating a positive change of more than 10% year-over-year.

Adobe has consistently exceeded expectations within this metric, as seen in the chart below.

Zacks Investment Research
Image Source: Zacks Investment Research

Share Performance

ADBE shares have experienced rollercoaster price action in 2023 so far, up a marginal 0.5% and underperforming relative to the S&P 500.

Zacks Investment Research
Image Source: Zacks Investment Research

And over the last six months, the story has remained the same, with ADBE shares again underperforming relative to the S&P 500.

Zacks Investment Research
Image Source: Zacks Investment Research

Quarterly Estimates

Analysts have been silent for the quarter to be reported, with zero earnings estimate revisions hitting the tape over the last several months. The Zacks Consensus EPS Estimate of $3.66 indicates an improvement of 8% year-over-year.

Zacks Investment Research
Image Source: Zacks Investment Research

Our consensus revenue estimate stands at $4.6 billion, indicating a climb of 8.3% year-over-year.

Quarterly Performance

Adobe sports a stellar earnings track record, exceeding both earnings and revenue estimates in ten consecutive quarters.

Just in its latest release, the tech giant delivered a 3% bottom line beat and reported revenue modestly above expectations. Below is a chart illustrating the company’s revenue on a quarterly basis.

Zacks Investment Research
Image Source: Zacks Investment Research

Putting Everything Together

Adobe shares have underperformed relative to the S&P 500 across several timeframes, but remain marginally in the green year-to-date.

Within the release, a key metric for investors to watch closely is the company’s subscription revenue, a metric that Adobe has consistently positively surprised on.

Further, analysts have been silent for the quarter to be reported, with estimates suggesting year-over-year growth in both earnings and revenue.

Heading into the release, Adobe (ADBE - Free Report) is currently a Zacks Rank #3 (Hold).


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Adobe Inc. (ADBE) - free report >>

Published in