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Adobe Systems (ADBE) closed the most recent trading day at $345.62, moving +2.03% from the previous trading session. The stock exceeded the S&P 500, which registered a gain of 0.73% for the day. Elsewhere, the Dow gained 0.18%, while the tech-heavy Nasdaq added 1.21%.
The software maker’s stock has dropped by 11.38% in the past month, falling short of the Computer and Technology sector’s gain of 2.75% and the S&P 500’s gain of 0.47%.
Market participants will be closely following the financial results of Adobe Systems in its upcoming release. The company is predicted to post an EPS of $5.17, indicating a 11.18% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $5.9 billion, up 9.01% from the year-ago period.
For the full year, the Zacks Consensus Estimates are projecting earnings of $20.63 per share and revenue of $23.55 billion, which would represent changes of +12% and +9.49%, respectively, from the prior year.
Investors should also take note of any recent adjustments to analyst estimates for Adobe Systems. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts’ confidence in the business performance and profit potential.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we’ve crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Adobe Systems currently has a Zacks Rank of #2 (Buy).
Digging into valuation, Adobe Systems currently has a Forward P/E ratio of 16.42. For comparison, its industry has an average Forward P/E of 23.49, which means Adobe Systems is trading at a discount to the group.
It’s also important to note that ADBE currently trades at a PEG ratio of 1.32. 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. By the end of yesterday’s trading, the Computer – Software industry had an average PEG ratio of 2.2.
The Computer – Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 73, placing it within the top 30% of over 250 industries.
