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

Adobe Systems (ADBE) closed at $514.68 in the latest trading session, marking a +1.08% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.18%.

Coming into today, shares of the software maker had gained 4.95% in the past month. In that same time, the Computer and Technology sector gained 2.1%, while the S&P 500 gained 0.04%.

Investors will be hoping for strength from ADBE as it approaches its next earnings release, which is expected to be June 17, 2021. The company is expected to report EPS of $2.81, up 14.69% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.73 billion, up 19.31% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $11.88 per share and revenue of $15.49 billion, which would represent changes of +17.62% and +20.4%, respectively, from the prior year.

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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate has moved 0.02% higher within the past month. ADBE is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, ADBE currently has a Forward P/E ratio of 42.85. This represents a premium compared to its industry's average Forward P/E of 35.96.

Also, we should mention that ADBE has a PEG ratio of 2.34. 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. The Computer - Software industry currently had an average PEG ratio of 2.42 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 182, putting it in the bottom 29% 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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