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

Adobe Systems (ADBE) closed at $307.90 in the latest trading session, marking a +0.86% move from the prior day. This move outpaced the S&P 500's daily gain of 0.22%. Elsewhere, the Dow gained 0.2%, while the tech-heavy Nasdaq added 0.18%.

Heading into today, shares of the software maker had gained 12.5% over the past month, outpacing the Computer and Technology sector's gain of 4.77% and the S&P 500's gain of 3.89% in that time.

Wall Street will be looking for positivity from ADBE as it approaches its next earnings report date. The company is expected to report EPS of $2.26, up 23.5% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $2.97 billion, up 20.5% from the year-ago period.

ADBE's full-year Zacks Consensus Estimates are calling for earnings of $7.84 per share and revenue of $11.15 billion. These results would represent year-over-year changes of +15.98% and +23.49%, respectively.

It is also important to note the recent changes to analyst estimates for ADBE. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.01% 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 38.94. This valuation marks a premium compared to its industry's average Forward P/E of 31.8.

Investors should also note that ADBE has a PEG ratio of 2.4 right now. 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. The Computer - Software industry currently had an average PEG ratio of 2.34 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 90, putting it in the top 36% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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