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Why Adobe Systems (ADBE) Outpaced the Stock Market Today

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Adobe Systems (ADBE - Free Report) closed at $478.43 in the latest trading session, marking a +0.63% move from the prior day. The stock outperformed the S&P 500, which registered a daily gain of 0.03%. Meanwhile, the Dow experienced a drop of 0.56%, and the technology-dominated Nasdaq saw an increase of 0.59%.

Heading into today, shares of the software maker had gained 0.5% over the past month, lagging the Computer and Technology sector's gain of 6.87% and the S&P 500's gain of 4.19% in that time.

The upcoming earnings release of Adobe Systems will be of great interest to investors. The company's earnings report is expected on June 13, 2024. It is anticipated that the company will report an EPS of $4.39, marking a 12.28% rise compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $5.28 billion, indicating a 9.65% increase compared to the same quarter of the previous year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $17.96 per share and revenue of $21.42 billion. These totals would mark changes of +11.76% and +10.37%, respectively, from last year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Adobe Systems. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Adobe Systems is currently a Zacks Rank #4 (Sell).

In terms of valuation, Adobe Systems is currently trading at a Forward P/E ratio of 26.48. This indicates a discount in contrast to its industry's Forward P/E of 28.88.

Investors should also note that ADBE has a PEG ratio of 2.09 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Computer - Software industry was having an average PEG ratio of 2.49.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 53, which puts it in the top 22% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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