Adobe Systems (ADBE - Free Report) closed the most recent trading day at $250.63, moving +1.96% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.15%. At the same time, the Dow lost 0.32%, and the tech-heavy Nasdaq gained 0.42%.
Heading into today, shares of the software maker had lost 3% over the past month, lagging the Computer and Technology sector's loss of 1.79% and the S&P 500's loss of 1.1% 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. The company is expected to report EPS of $1.88, up 49.21% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.42 billion, up 20.8% from the year-ago period.
Investors should also note any recent changes to analyst estimates for ADBE. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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 remained stagnant. ADBE is holding a Zacks Rank of #2 (Buy) right now.
Looking at its valuation, ADBE is holding a Forward P/E ratio of 31.06. For comparison, its industry has an average Forward P/E of 29.95, which means ADBE is trading at a premium to the group.
It is also worth noting that ADBE currently has a PEG ratio of 1.89. 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. ADBE's industry had an average PEG ratio of 2.13 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 81, putting it in the top 32% 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.