Adobe Systems (ADBE - Free Report) closed at $365.34 in the latest trading session, marking a -1.64% move from the prior day. This move was narrower than the S&P 500's daily loss of 2.05%. At the same time, the Dow lost 1.89%, and the tech-heavy Nasdaq lost 2.07%.
ADBE will be looking to display strength as it nears its next earnings release. On that day, ADBE is projected to report earnings of $2.34 per share, which would represent year-over-year growth of 27.87%. Meanwhile, our latest consensus estimate is calling for revenue of $3.17 billion, up 15.65% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $9.79 per share and revenue of $12.99 billion, which would represent changes of +24.4% and +16.25%, respectively, from the prior 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. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ADBE currently has a Zacks Rank of #2 (Buy).
In terms of valuation, ADBE is currently trading at a Forward P/E ratio of 37.94. Its industry sports an average Forward P/E of 30.36, so we one might conclude that ADBE is trading at a premium comparatively.
Also, we should mention that ADBE has a PEG ratio of 2.37. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Computer - Software stocks are, on average, holding a PEG ratio of 2.91 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 79, 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.
To follow ADBE in the coming trading sessions, be sure to utilize Zacks.com.