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Adobe Systems (ADBE) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Adobe Systems (ADBE - Free Report) closed at $293.17, marking a +1.57% move from the previous day. The stock outpaced the S&P 500's daily gain of 1.5%. Elsewhere, the Dow gained 1.48%, while the tech-heavy Nasdaq added 1.95%.

Coming into today, shares of the software maker had lost 6.51% in the past month. In that same time, the Computer and Technology sector lost 4.12%, while the S&P 500 lost 4.19%.

Investors will be hoping for strength from ADBE as it approaches its next earnings release. In that report, analysts expect ADBE to post earnings of $1.97 per share. This would mark year-over-year growth of 13.87%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.81 billion, up 22.65% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.81 per share and revenue of $11.17 billion, which would represent changes of +15.53% and +23.66%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for ADBE. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually 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 36.95 right now. This represents a premium compared to its industry's average Forward P/E of 29.41.

Meanwhile, ADBE's PEG ratio is currently 2.11. 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 2.02 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 87, putting it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.


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