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Adobe (ADBE) to Post Q4 Earnings: What's in the Offing?

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Adobe Inc. (ADBE - Free Report) is set to report fourth-quarter fiscal 2023 results on Dec 13.

For the fiscal fourth quarter, the company expects non-GAAP earnings in the band of $4.10-$4.15 per share. The Zacks Consensus Estimate for earnings is pegged at $4.13 per share, indicating growth of 14.7% from the year-ago reported figure.

Adobe projects total revenues between $4.975 billion and $5.025 billion. The consensus mark for the same is pegged at $5.01 billion, implying growth of 10.7% from the year-ago reported figure.

The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average earnings surprise being 3.29%.

Factors to Consider

Adobe’s strong focus on its Digital Media business is likely to have aided its performance in the fiscal fourth 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 fourth-quarter fiscal 2023, Adobe expects Digital Media revenues between $3.67 billion and $3.70 billion. The Zacks Consensus Estimate for the same is pegged at $3.68 billion, indicating growth of 11.6% year over year.

The rising demand for Photoshop and Lightroom and solid momentum across the Adobe Express platform might have contributed well to the performance of Creative Cloud. Strength in Adobe Firefly is likely to have remained a plus.

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 fourth quarter. Also, the strength in Adobe Journey Optimizer's book of business might have been a positive

Strength in Workfront might have also contributed well.

ADBE expects the Digital Experience segment’s revenues between $1.25 billion and $1.27 billion. The Zacks Consensus Estimate for the same is pegged at $1.26 billion, indicating growth of 9.6% year over year.

Also, the company expects Digital Experience subscription revenues within $1.11-$1.13 billion.

However, the impacts of ongoing tensions between Russia and Ukraine are expected to have continued acting as 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.

Adobe has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

ADBE currently has a Zacks Rank #2.

Stocks to Consider

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

Micron Technology (MU - Free Report) has an Earnings ESP of +1.78% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Micron Technology is scheduled to release first-quarter fiscal 2024 results on Dec 20. The Zacks Consensus Estimate for MU’s earnings per share is pegged at a loss of $1.01.

Lennar Corporation (LEN - Free Report) has an Earnings ESP of +0.74% and currently carries a Zacks Rank #2.

Lennar Corporation is set to report fourth-quarter fiscal 2023 results on Dec 14. The Zacks Consensus Estimate for LEN’s earnings is pinned at $4.64 per share.

Costco Wholesale (COST - Free Report) has an Earnings ESP of +1.40% and a Zacks Rank #3 at present.

Costco Wholesale is expected to report first-quarter fiscal 2024 results on Dec 14. The Zacks Consensus Estimate for COST’s earnings is pegged at $3.44 per share.

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

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