Adobe Systems (ADBE) Increases Yet Falls Behind Market: What Investors Need to Know

In the latest market close, Adobe Systems (ADBE) reached $477.56, with a +0.87% movement compared to the previous day. The stock lagged the S&P 500's daily gain of 1.02%. On the other hand, the Dow registered a gain of 0.4%, and the technology-centric Nasdaq increased by 2.03%.

The software maker's shares have seen a decrease of 6.18% over the last month, not keeping up with the Computer and Technology sector's loss of 5.32% and the S&P 500's loss of 3.15%.

Investors will be eagerly watching for the performance of Adobe Systems in its upcoming earnings disclosure. In that report, analysts expect Adobe Systems to post earnings of $4.39 per share. This would mark year-over-year growth of 12.28%. Meanwhile, our latest consensus estimate is calling for revenue of $5.28 billion, up 9.65% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $17.96 per share and revenue of $21.42 billion, which would represent changes of +11.76% and +10.37%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Adobe Systems. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.1% downward. As of now, Adobe Systems holds a Zacks Rank of #3 (Hold).

Digging into valuation, Adobe Systems currently has a Forward P/E ratio of 26.36. This represents a discount compared to its industry's average Forward P/E of 28.26.

We can also see that ADBE currently has a PEG ratio of 2.08. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Computer - Software stocks are, on average, holding a PEG ratio of 2.28 based on yesterday's closing prices.

The Computer - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 82, finds itself in the top 33% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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