Adobe Systems (ADBE) Gains As Market Dips: What You Should Know
In the latest trading session, Adobe Systems (ADBE) closed at $472.44, marking a +0.09% move from the previous day. This change outpaced the S&P 500's 0.3% loss on the day. At the same time, the Dow lost 0.57%, and the tech-heavy Nasdaq gained 0.09%.
Heading into today, shares of the software maker had lost 5.57% over the past month, lagging the Computer and Technology sector's gain of 6.16% and the S&P 500's gain of 4.43% in that time.
Investors will be hoping for strength from ADBE as it approaches its next earnings release. The company is expected to report EPS of $2.77, up 22.03% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.77 billion, up 22.04% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.25 per share and revenue of $15.24 billion. These totals would mark changes of +11.39% and +18.43%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for ADBE. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ADBE currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, ADBE is holding a Forward P/E ratio of 41.96. For comparison, its industry has an average Forward P/E of 36.41, which means ADBE is trading at a premium to the group.
Also, we should mention that ADBE has a PEG ratio of 2.21. 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. Computer - Software stocks are, on average, holding a PEG ratio of 2.76 based on yesterday's closing prices.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 181, putting it in the bottom 30% 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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