At the last market close, Adobe Systems (ADBE) touched $567.98, a -0.52% move from the previous day. The stock lagged behind the S&P 500, which recorded a daily loss of 0.12%. Meanwhile, the Dow was down 0.25% and the tech-dominated Nasdaq was down 0.41%.
Year to date, the software maker’s stock has lost 10.06% in the past month, trailing the Computer & Technology sector’s 6.12% gain and the S&P 500’s 4.83% gain over the period.
The investment community will be paying close attention to Adobe Systems’ earnings results in its upcoming release. The company is scheduled to announce its earnings on March 14th, 2024. On that date, Adobe Systems is forecast to report earnings of $4.38 per share, which would represent a 15.26% year-over-year growth rate. Meanwhile, our latest consensus estimate calls for revenue of $5.13 billion, up 10.19% from the year-ago quarter.
For the full fiscal year, Zacks Consensus Estimates are calling for earnings of $17.89 per share and revenue of $21.41 billion, indicating year-over-year changes of +11.33% and +10.33%, respectively.
Investors may also be taking note of recent changes in analyst estimates for Adobe Systems. Recent revisions mostly reflect the latest short-term business trends. As such, positive estimate revisions reflect analysts’ optimism about the company’s operations and profitability.
Empirical research shows that these revisions in valuations are directly correlated with future stock price performance. To take advantage of this, we formed the Zacks Rank, a quantitative model that incorporates these valuation changes and represents a sustainable rating system.
The Zacks Ranking System, which runs from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of externally audited outperformance, with #1 ranked stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS Estimate has moved up by 0.01%. Currently, Adobe Systems carries a Zacks Rank #2 (Buy).
For valuation context, Adobe Systems currently trades at a forward P/E ratio of 31.92. This represents a discount to the industry average forward P/E of 32.5.
It should further be noted that ADBE currently has a PEG ratio of 2.45. The PEG ratio is similar to the commonly used P/E ratio, but this measure also includes the company’s expected earnings growth rate. As of the close of business yesterday, the Computer & Software industry had an average PEG ratio of 2.45.
The computer software industry is part of the computer and technology sector. With its current Zacks Industry Rank of 50, this industry ranks in the top 20% of all industries, with over 250.
The Zacks Industry Rank assesses the strength of our various industry groups by determining the average Zacks Rank of the individual stocks that make up the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics and more at Zacks.com.
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