Adobe Systems (ADBE - Free Report) closed the most recent trading day at $358, moving +1.95% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.73%. At the same time, the Dow added 0.51%, and the tech-heavy Nasdaq gained 1.34%.
Heading into today, shares of the software maker had gained 5% over the past month, outpacing the Computer and Technology sector's gain of 2.97% and the S&P 500's of 0% in that time.
ADBE will be looking to display strength as it nears its next earnings release. On that day, ADBE is projected to report earnings of $2.23 per share, which would represent year-over-year growth of 30.41%. Our most recent consensus estimate is calling for quarterly revenue of $3.04 billion, up 17.04% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $9.80 per share and revenue of $13.15 billion, which would represent changes of +24.52% and +17.68%, respectively, from the prior year.
It is also important to note the 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. 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 has moved 0.02% higher within the past month. ADBE currently has a Zacks Rank of #2 (Buy).
Valuation is also important, so investors should note that ADBE has a Forward P/E ratio of 35.83 right now. Its industry sports an average Forward P/E of 31.18, so we one might conclude that ADBE is trading at a premium comparatively.
We can also see that ADBE currently has a PEG ratio of 2.21. 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 was holding an average PEG ratio of 2.22 at yesterday's closing price.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 42, which puts it in the top 17% 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.
To follow ADBE in the coming trading sessions, be sure to utilize Zacks.com.