Adobe Systems (ADBE) Outpaces Stock Market Gains: What You Should Know
Adobe Systems (ADBE) closed at $413.95 in the latest trading session, marking a +1.29% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.57%. Meanwhile, the Dow gained 0.7%, and the Nasdaq, a tech-heavy index, lost 0.1%.
Prior to today's trading, shares of the software maker had lost 5.32% over the past month. This has was narrower than the Computer and Technology sector's loss of 11.12% and lagged the S&P 500's loss of 5.26% in that time.
Adobe Systems will be looking to display strength as it nears its next earnings release. In that report, analysts expect Adobe Systems to post earnings of $3.30 per share. This would mark year-over-year growth of 8.91%. Our most recent consensus estimate is calling for quarterly revenue of $4.34 billion, up 13.12% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $13.58 per share and revenue of $17.83 billion, which would represent changes of +8.81% and +12.93%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for Adobe Systems. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 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. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. Adobe Systems is currently a Zacks Rank #3 (Hold).
In terms of valuation, Adobe Systems is currently trading at a Forward P/E ratio of 30.09. Its industry sports an average Forward P/E of 28.39, so we one might conclude that Adobe Systems is trading at a premium comparatively.
Meanwhile, ADBE's PEG ratio is currently 1.73. 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. The Computer - Software industry currently had an average PEG ratio of 2.37 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 160, which puts it in the bottom 37% 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.
To follow ADBE in the coming trading sessions, be sure to utilize Zacks.com.
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
Adobe Inc. (ADBE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
