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Adobe Systems (ADBE) Dips More Than Broader Markets: What You Should Know

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Adobe Systems (ADBE - Free Report) closed the most recent trading day at $274.28, moving -0.73% from the previous trading session. This change lagged the S&P 500's daily loss of 0.16%. Elsewhere, the Dow lost 0.07%, while the tech-heavy Nasdaq lost 0.52%.

Coming into today, shares of the software maker had lost 2.56% in the past month. In that same time, the Computer and Technology sector gained 1.74%, while the S&P 500 gained 3.12%.

Wall Street will be looking for positivity from ADBE as it approaches its next earnings report date. This is expected to be June 18, 2019. In that report, analysts expect ADBE to post earnings of $1.78 per share. This would mark year-over-year growth of 7.23%. Meanwhile, our latest consensus estimate is calling for revenue of $2.70 billion, up 22.99% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.81 per share and revenue of $11.15 billion. These totals would mark changes of +15.53% and +23.45%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for ADBE. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 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. The Zacks Consensus EPS estimate remained stagnant within the past month. ADBE is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that ADBE has a Forward P/E ratio of 35.36 right now. For comparison, its industry has an average Forward P/E of 30.01, which means ADBE is trading at a premium to the group.

Meanwhile, ADBE's PEG ratio is currently 2.16. 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 2.16 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 159, which puts it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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