Markets

Adobe Systems (ADBE) Stock Sinks As Market Gains: What You Should Know

Adobe Systems (ADBE) closed the most recent trading day at $276.14, moving -1.13% from the previous trading session. This move lagged the S&P 500's daily gain of 0.03%. Elsewhere, the Dow gained 0.28%, while the tech-heavy Nasdaq lost 0.04%.

Prior to today's trading, shares of the software maker had lost 3.24% over the past month. This has lagged the Computer and Technology sector's gain of 2.03% and the S&P 500's gain of 2.25% in that time.

Investors will be hoping for strength from ADBE as it approaches its next earnings release, which is expected to be September 17, 2019. In that report, analysts expect ADBE to post earnings of $1.97 per share. This would mark year-over-year growth of 13.87%. Our most recent consensus estimate is calling for quarterly revenue of $2.81 billion, up 22.66% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.81 per share and revenue of $11.17 billion, which would represent changes of +15.53% and +23.66%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for ADBE. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 remained stagnant within the past month. ADBE currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, ADBE is holding a Forward P/E ratio of 35.75. Its industry sports an average Forward P/E of 27.82, so we one might conclude that ADBE is trading at a premium comparatively.

Meanwhile, ADBE's PEG ratio is currently 2.04. 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 2.04 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 54, which puts it in the top 22% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


Click to get this free report

Adobe Systems Incorporated (ADBE): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.