What to Expect From Adobe's Next Quarterly Earnings…

What to Expect From Adobe's Next Quarterly Earnings Report

San Jose, California-based Adobe Inc. (ADBE) is a diversified software company operating through Digital Media, Digital Experience, and Publishing and Advertising segments. With a market cap of $211.8 billion, it operates as one of the largest software companies in the world. The software giant is expected to release its Q4 earnings after the market closes on Wednesday, Dec. 11.

Ahead of the event, analysts expect Adobe to report a profit of $3.77 per share, up 7.1% from $3.52 per share reported in the year-ago quarter. The company has surpassed Wall Street’s earnings estimates in three of the past four quarters while missing on another occasion. Its adjusted EPS of $3.81 for the last reported quarter exceeded the consensus estimates by nearly 5%.

For fiscal 2024, analysts expect Adobe to report an adjusted EPS of $14.82, up 15.8% from $12.80 in fiscal 2023. In fiscal 2025, its adjusted EPS is expected to grow nearly 13% year-over-year to $16.74.

ADBE stock has declined 19.3% on a YTD basis, significantly underperforming the S&P 500 Index’s ($SPX) 22.1% gain and the Technology Select Sector SPDR Fund’s (XLK) 19.6% return during the same time frame.

Despite reporting better-than-expected Q3 revenue of $5.4 billion on Sep. 12, shares of Adobe plummeted 8.5% the following day due to the forecast for Q4 earnings that fell below analysts' estimates. The company cited stiff competition and soft demand for its AI-integrated editing tools as factors impacting its outlook, exacerbated by high interest rates and a challenging economic environment that led customers to cut costs. Additionally, concerns about rising operating expenses, which increased to $2.9 billion, further fueled investor concerns about Adobe's profitability in the coming quarters.

The consensus opinion on ADBE stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 31 analysts covering the stock, 22 recommend “Strong Buy,” one advises “Moderate Buy,” six suggest “Hold,” and two advocate “Strong Sell” rating. The mean price target of $609.27 represents a potential upside of 26.7% from current price levels.

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On the date of publication, Aditya Sarawgi 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.

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