Adobe Systems (ADBE - Free Report) closed at $238.59 in the latest trading session, marking a +0.29% move from the prior day. This change outpaced the S&P 500's 2.06% loss on the day. At the same time, the Dow lost 2.13%, and the tech-heavy Nasdaq lost 1.25%.
Heading into today, shares of the software maker had lost 11.16% over the past month, lagging the Computer and Technology sector's loss of 6.61% and the S&P 500's loss of 3.01% in that time.
ADBE will be looking to display strength as it nears 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.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.80 per share and revenue of $8.99 billion. These totals would mark changes of +57.77% and +23.12%, respectively, from last year.
Any recent changes to analyst estimates for ADBE should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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 currently a Zacks Rank #2 (Buy).
In terms of valuation, ADBE is currently trading at a Forward P/E ratio of 35. For comparison, its industry has an average Forward P/E of 31.23, which means ADBE is trading at a premium to the group.
We can also see that ADBE currently has a PEG ratio of 2.13. 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 2.12 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 93, putting it in the top 36% 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.