Apps & Software
Adobe Earnings Preview: Can It Beat Low Expectations?
Published:
Last Updated:
The three major U.S. equity indexes tanked Tuesday. The Dow Jones industrials ended the day down 3.94%, the S&P 500 fell by 4.32% and the Nasdaq plunged 5.16%. All 11 sectors ended the day with losses, ranging from 5.5% (communications services) to 2.5% (energy). The tech and consumer cyclical sectors also had big losses of 5.3% and 5.2%, respectively.
The monthly report on the producer price index (PPI) released Wednesday morning showed it dropped by 0.1% month over month in August and fell from 9.8% in July to 8.7% last month. The Dow and the S&P 500 traded marginally higher early Wednesday while the Nasdaq lagged.
Before Wednesday’s open, Li-Cycle reported a big miss on expected revenue and a bigger-than-expected per-share loss. The shares traded down up about 0.2%.
Software maker Adobe Inc. (NASDAQ: ADBE) reports quarterly earnings after markets close Thursday. The company has seen its share price decline by 13.2% over the past 12 months. Half that decline came from a drop of 7.1% during Tuesday’s bloodbath. Since posting an all-time high in late November, the shares have plunged by 45.3%. The company reset expectations lower when it reported results for the most recent quarter, but a recent analyst’s downgrade could point to lower guidance for the current quarter.
Of 31 analysts covering the stock, 23 have a Buy or Strong Buy rating and the other eight rate the shares at Hold. At a recent price of around $368.40 a share, the upside potential based on a median price target of $469.50 is 27.4%. At the high target of $549.00, the upside potential is 49%.
Fiscal third-quarter revenue is forecast at $4.44 billion, which would be up 1.2% sequentially and 12.7% higher year over year. Adjusted earnings per share (EPS) are forecast at $3.35, flat sequentially and up 7.7% year over year. For the full 2022 fiscal year ending in November, analysts forecast EPS of $13.54, up 8.5%, on sales of $17.68 billion, up 12%.
Adobe stock trades at 27.2 times expected 2022 EPS, 23.2 times estimated 2023 earnings of $15.90 and 19.7 times estimated 2024 earnings of $18.73 per share. The stock’s 52-week trading range is $338.00 to $699.54. Adobe does not pay a dividend. Total shareholder return for the past year was negative 42.9%.
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.