In the latest trading session, Adobe Systems (ADBE - Free Report) closed at $264.09, marking a +1.31% move from the previous day. This move outpaced the S&P 500's daily loss of 0.35%. Meanwhile, the Dow lost 0.68%, and the Nasdaq, a tech-heavy index, added 0.08%.
Heading into today, shares of the software maker had gained 1.51% over the past month, outpacing the Computer and Technology sector's gain of 1.48% and lagging the S&P 500's gain of 2.47% in that time.
Investors will be hoping for strength from ADBE as it approaches its next earnings release, which is expected to be December 13, 2018. On that day, ADBE is projected to report earnings of $1.88 per share, which would represent year-over-year growth of 49.21%. Our most recent consensus estimate is calling for quarterly revenue of $2.42 billion, up 20.77% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $6.80 per share and revenue of $8.99 billion, which would represent changes of +57.77% and +23.12%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for ADBE. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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, the Zacks Consensus EPS estimate has moved 0.78% higher. ADBE is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that ADBE has a Forward P/E ratio of 38.38 right now. Its industry sports an average Forward P/E of 35.44, so we one might conclude that ADBE is trading at a premium comparatively.
It is also worth noting that ADBE currently has a PEG ratio of 2.34. 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. The Computer - Software industry currently had an average PEG ratio of 2.26 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 57, putting it in the top 22% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.