A wise investment decision involves buying well-performing stocks at the right time while selling those that are at risk. A rise in share price and strong fundamentals signal a stock's bullish run.
Adobe Systems Incorporated ADBE has performed extremely well so far this year and has the potential to carry on the momentum in the near term. Therefore, if you haven't taken advantage of the share price appreciation yet, it's time you add the stock to your portfolio. What Makes it an Attractive Pick?
A look at Adobe's price trend reveals that the stock has had an impressive run on the bourse year to date. The company has gained a massive 68.6%, significantly outperforming the industry 's rally of 31.8%.
Solid Rank & VGM Score
Adobe carries a Zacks Rank #2 (Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or #2 offer the best investment opportunities for investors. Thus, the company appears to be a convincing investment proposition at the moment.
Positive Earnings Surprise History
Adobe has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive average earnings surprise of 7.8%.
Adobe Systems Incorporated Price and EPS Surprise
Adobe Systems Incorporated Price and EPS Surprise | Adobe Systems Incorporated Quote
Strong Growth Prospects
The Zacks Consensus Estimate for fiscal 2017 earnings of $4.20 reflects year-over-year growth of 39.4%. Moreover, earnings are expected to register 30.5% growth in fiscal 2018. The stock has long-term expected earnings per share growth rate of 17%.
Solid Growth Drivers
Currently, there is strong demand for Adobe's Creative Cloud software, which is adding to its subscriber base. Also, continued growth of Adobe Document Cloud subscriptions and Adobe Experience Cloud is aiding the company.
Adobe Experience Cloud was recently enhanced with new auto-focused analytics, personalization and advertising capacities. Using Adobe Experience Cloud and the Automotive Grade Linux project, companies can now introduce digital marketing in cars.
Also, companies can now personalize audio as well as in-car screen ads based on behavioral patterns (like interactions with infotainment systems and song selections) of people behind the wheels.
Adobe has been making great efforts toward establishing its presence in cloud-related software areas such as documents and marketing. Adobe Experience Manager, which enables brands to offer a personalized experience, is also witnessing robust growth.
We remain optimistic about Adobe's market position, compelling product lines, continued innovation, strong cash flow generation and solid balance sheet. Also, the company's expansion in growing markets such as artificial intelligence and machine-learning framework is a big positive.
Other Stocks to Consider
Some other stocks worth considering in the broader technology sector include Activision Blizzard ATVI , Red Hat RHT and Five9 FIVN , each carrying a Zacks Rank #2.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Long-term earnings per share growth rate for Activision, Red Hat and Five9 is projected to be 13.8%, 15.8% and 20%, respectively.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Five9, Inc. (FIVN): Free Stock Analysis Report Red Hat, Inc. (RHT): Free Stock Analysis Report Adobe Systems Incorporated (ADBE): Free Stock Analysis Report Activision Blizzard, Inc (ATVI): Free Stock Analysis Report To read this article on Zacks.com click here.