Adobe Systems (ADBE) Outpaces Stock Market Gains: What You Should Know
Adobe Systems (ADBE) closed at $447.97 in the latest trading session, marking a +0.82% move from the prior day. This move outpaced the S&P 500's daily gain of 0.72%. At the same time, the Dow added 0.89%, and the tech-heavy Nasdaq gained 1.47%.
Coming into today, shares of the software maker had gained 0.31% in the past month. In that same time, the Computer and Technology sector gained 7.08%, while the S&P 500 gained 5.85%.
Wall Street will be looking for positivity from ADBE as it approaches its next earnings report date. In that report, analysts expect ADBE to post earnings of $2.40 per share. This would mark year-over-year growth of 17.07%. Meanwhile, our latest consensus estimate is calling for revenue of $3.15 billion, up 11.24% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.77 per share and revenue of $12.71 billion. These totals would mark changes of +24.14% and +13.81%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for ADBE. These revisions help to show the ever-changing nature 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.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ADBE is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, ADBE is currently trading at a Forward P/E ratio of 45.49. For comparison, its industry has an average Forward P/E of 32.92, which means ADBE is trading at a premium to the group.
We can also see that ADBE currently has a PEG ratio of 2.84. 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. The Computer - Software was holding an average PEG ratio of 2.84 at yesterday's closing price.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 100, putting it in the top 40% 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.
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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.