Adobe Systems (ADBE) Stock Sinks As Market Gains: What You Should Know
In the latest trading session, Adobe Systems (ADBE) closed at $297.07, marking a -0.14% move from the previous day. This move lagged the S&P 500's daily gain of 0.05%. Meanwhile, the Dow gained 0.11%, and the Nasdaq, a tech-heavy index, added 0.11%.
Heading into today, shares of the software maker had gained 10.5% over the past month, outpacing the Computer and Technology sector's gain of 4.89% and the S&P 500's gain of 4.32% in that time.
Investors will be hoping for strength from ADBE as it approaches its next earnings release. In that report, analysts expect ADBE to post earnings of $2.26 per share. This would mark year-over-year growth of 23.5%. Our most recent consensus estimate is calling for quarterly revenue of $2.97 billion, up 20.5% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.84 per share and revenue of $11.15 billion, which would represent changes of +15.98% and +23.49%, respectively, from the prior year.
Any recent changes to analyst estimates for ADBE should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate has moved 0.06% higher within the past month. ADBE is currently sporting a Zacks Rank of #2 (Buy).
Looking at its valuation, ADBE is holding a Forward P/E ratio of 37.95. This represents a premium compared to its industry's average Forward P/E of 30.81.
Meanwhile, ADBE's PEG ratio is currently 2.34. 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 2.29 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 40, which puts it in the top 16% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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.
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