Valued at a market cap of $190.9 billion, Adobe Inc. (ADBE) is a diversified software company that operates through three segments: Digital Media, Digital Experience, and Publishing and Advertising. The San Jose, California-based company picks up licensing fees from customers, which form the bulk of its revenue. It is expected to announce its fiscalQ1 earnings results on Thursday, Mar. 13.
Ahead of this event, analysts project the computer software company to report a profit of $4.07 per share, up 15.3% from $3.53 per share in the year-ago quarter. The company has exceeded Wall Street's earnings estimates in three of the last four quarters while missing on another occasion. In Q4 2024, Adobe’s EPS of $4.07 exceeded the forecasted figure by a solid margin of 8%.
For fiscal 2025, analysts expect Adobe to report an EPS of $16.65, up 11.7% from a profit of $14.90 per share in fiscal 2024.
Shares of Adobe have declined 27.9% over the past 52 weeks, significantly falling behind both the S&P 500 Index's ($SPX) 24.1% rise and the Technology Select Sector SPDR Fund’s (XLK) 15.8% return over the same time frame.
Shares of Adobe plunged 13.7% following its Q4 earnings release on Dec. 11, despite delivering better-than-expected Q4 earnings. Moreover, the top line improved 11.1% from the year-ago quarter, while the bottom line grew 12.6% year-over-year. However, disappointing fiscal 2025 guidance and underwhelming forecasts for its digital media segment led to its sharp fall in price.
For fiscal 2025, Adobe expects total revenues to range between $23.30 billion and $23.55 billion. Unfavorable forex and continued move to subscriptions from perpetual offerings are expected to negatively impact revenues by $200 million. Furthermore, the company expects its earnings for the entire year to land between $20.20 per share and $20.50 per share.
Wall Street analysts are moderately optimistic about Adobe’s stock, with a "Moderate Buy" rating overall. Among 33 analysts covering the stock, 21 recommend "Strong Buy," one suggests a “Moderate Buy,” nine recommend “Hold,” one suggests a “Moderate Sell,” and one indicates a “Strong Sell” rating. This configuration is less bullish than three months ago, with 23 analysts suggesting a “Strong Buy.”
The mean price target for Adobe is $575.42, which indicates a healthy 29.9% potential upside from the current levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.More news from Barchart
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