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Adobe Systems (ADBE) Stock Sinks As Market Gains: What You Should Know

In the latest trading session, Adobe Systems (ADBE) closed at $241.95, marking a -0.17% move from the previous day. This move lagged the S&P 500's daily gain of 0.22%. Meanwhile, the Dow gained 0.59%, and the Nasdaq, a tech-heavy index, added 0.16%.

Prior to today's trading, shares of the software maker had gained 7.15% over the past month. This has outpaced the Computer and Technology sector's loss of 0.37% and the S&P 500's gain of 0.49% in that time.

Wall Street will be looking for positivity from ADBE as it approaches its next earnings report date. This is expected to be March 21, 2019. On that day, ADBE is projected to report earnings of $1.61 per share, which would represent year-over-year growth of 3.87%. Meanwhile, our latest consensus estimate is calling for revenue of $2.54 billion, up 22.28% from the prior-year quarter.

ADBE's full-year Zacks Consensus Estimates are calling for earnings of $7.77 per share and revenue of $11.15 billion. These results would represent year-over-year changes of +14.94% and +23.43%, respectively.

Investors should also note any recent changes to analyst estimates for ADBE. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Within the past 30 days, our consensus EPS projection remained stagnant. ADBE is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, ADBE currently has a Forward P/E ratio of 31.19. Its industry sports an average Forward P/E of 27.03, so we one might conclude that ADBE is trading at a premium comparatively.

We can also see that ADBE currently has a PEG ratio of 1.9. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Computer - Software stocks are, on average, holding a PEG ratio of 1.94 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 62, putting it in the top 25% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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