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Adobe Systems (ADBE) Beats Stock Market Upswing: What Investors Need to Know

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Adobe Systems (ADBE - Free Report) closed at $612.70 in the latest trading session, marking a +1.67% move from the prior day. The stock exceeded the S&P 500, which registered a gain of 0.74% for the day. Meanwhile, the Dow experienced a rise of 0.58%, and the technology-dominated Nasdaq saw an increase of 1.13%.

The investment community will be closely monitoring the performance of Adobe Systems in its forthcoming earnings report. The company is scheduled to release its earnings on December 13, 2023. On that day, Adobe Systems is projected to report earnings of $4.13 per share, which would represent year-over-year growth of 14.72%. Alongside, our most recent consensus estimate is anticipating revenue of $5.01 billion, indicating a 10.65% upward movement from the same quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $15.93 per share and revenue of $19.37 billion. These totals would mark changes of +16.19% and +10.01%, respectively, from last year.

Any recent changes to analyst estimates for Adobe Systems should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Adobe Systems is holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, Adobe Systems is currently trading at a Forward P/E ratio of 37.84. Its industry sports an average Forward P/E of 29.05, so one might conclude that Adobe Systems is trading at a premium comparatively.

Meanwhile, ADBE's PEG ratio is currently 2.8. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. Computer - Software stocks are, on average, holding a PEG ratio of 2.42 based on yesterday's closing prices.

The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 61, positioning it in the top 25% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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