Back to top

Image: Bigstock

Adobe Systems (ADBE) Stock Drops Despite Market Gains: Important Facts to Note

Read MoreHide Full Article

The latest trading session saw Adobe Systems (ADBE - Free Report) ending at $499.51, denoting a -0.77% adjustment from its last day's close. The stock trailed the S&P 500, which registered a daily gain of 0.39%. Elsewhere, the Dow saw a downswing of 0.13%, while the tech-heavy Nasdaq appreciated by 0.6%.

The software maker's shares have seen an increase of 1.71% over the last month, surpassing the Computer and Technology sector's gain of 0.59% and the S&P 500's gain of 1.06%.

Investors will be eagerly watching for the performance of Adobe Systems in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on December 11, 2024. The company's earnings per share (EPS) are projected to be $4.66, reflecting a 9.13% increase from the same quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $5.54 billion, showing a 9.71% escalation compared to the year-ago quarter.

ADBE's full-year Zacks Consensus Estimates are calling for earnings of $18.28 per share and revenue of $21.44 billion. These results would represent year-over-year changes of +13.75% and +10.46%, respectively.

It's also important for investors to be aware of any recent modifications to analyst estimates for Adobe Systems. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Adobe Systems is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, Adobe Systems is currently trading at a Forward P/E ratio of 27.54. For comparison, its industry has an average Forward P/E of 30.11, which means Adobe Systems is trading at a discount to the group.

One should further note that ADBE currently holds a PEG ratio of 2.1. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Computer - Software stocks are, on average, holding a PEG ratio of 2.56 based on yesterday's closing prices.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 38, putting it in the top 16% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


See More Zacks Research for These Tickers


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


Adobe Inc. (ADBE) - free report >>

Published in