Latest news with #ADBE
Yahoo
a day ago
- Business
- Yahoo
Wall Street Analysts Think Adobe (ADBE) Is a Good Investment: Is It?
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though? Let's take a look at what these Wall Street heavyweights have to say about Adobe Systems (ADBE) before we discuss the reliability of brokerage recommendations and how to use them to your advantage. Adobe currently has an average brokerage recommendation (ABR) of 1.78, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 36 brokerage firms. An ABR of 1.78 approximates between Strong Buy and Buy. Of the 36 recommendations that derive the current ABR, 23 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 63.9% and 5.6% of all recommendations. Brokerage Recommendation Trends for ADBE Check price target & stock forecast for Adobe here>>> While the ABR calls for buying Adobe, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential. Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations. In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement. Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision. ABR Should Not Be Confused With Zacks Rank In spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures. The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5. It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them. In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research. Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns. Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements. Should You Invest in ADBE? In terms of earnings estimate revisions for Adobe, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $20.63. Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Adobe. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Adobe. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Adobe Inc. (ADBE) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Business Insider
3 days ago
- Business
- Business Insider
Creative Adobe (ADBE) Roars Towards Lodestar Despite Wall Street Doubters
Adobe (ADBE) has had a rough run, both this year and over the past twelve months. Nearly $50 billion in market value has gone up in smoke since January amid uncertainty over whether AI could dismantle the once-solid moats in the creative software space, compounded by the company's conservative annual outlook for top-line growth. However, not all is doom and gloom. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. In tech, the market rarely rewards transitions from high-growth darlings to steady, defensive incumbents in the short to mid-term—and that seems to be exactly what's going on with Adobe. The silver lining is that profitability and fundamentals remain rock-solid, still generating meaningful shareholder value even with more modest revenue growth. The prolonged selloff has also left valuations significantly de-risked, creating a solid lineup of opportunities for long-term, value-oriented investors, with shares now trading well below sector averages. Against the S&P 500 (SPX), ADBE has underperformed, especially since April, according to chart data. However, all is not lost. That said, structural challenges are real and will need to be addressed if Adobe wants to fully regain market confidence as AI adoption accelerates. Still, the company is operationally holding up well against these headwinds—continuing to post strong results—and at some point, that should translate into alpha generation. At current prices, where a large portion (if not all) of those structural risks are arguably already priced in, the stock looks like a solid Buy for patient, long-term investors. Is Adobe's Moat Under Threat? Adobe's once-solid creative software empire is starting to show signs of strain. For fiscal 2025, management is guiding for single-digit revenue growth —a pace the company hasn't seen since 2014. Back then, the slowdown was tied to the growing pains of shifting from boxed software to a subscription model. This time, the challenges are far more structural and directly linked to the biggest theme shaping the tech sector today: AI. Operationally, Adobe's numbers still look strong. Since Q1 2023, the company has consistently beaten both top and bottom-line estimates, repeatedly raised guidance, and trimmed its share count by about 5% over the past year through buybacks. Earnings estimates for the next two years have actually trended higher over the last six months. Yet, despite this, ADBE shares are down more than 23% year-to-date and over 37% in the past twelve months. The disconnect between solid operations and weak share performance comes down to the market's growing belief that competitive threats in creative software are very real. Giants like Meta Platforms (META), Alphabet (GOOGL), and others such as Canva and Figma (FIG) are arming advertisers and creators with AI tools that let them produce high-quality images, videos, and marketing materials—without needing complex programs like Photoshop. That strikes directly at one of Adobe's most enduring advantages: being the go-to toolkit for professional-grade creative work. Why Adobe Is Seen as Lagging in the AI Race What's added extra weight to the bearish case is the market's perception that Adobe has been slow to roll out truly compelling AI capabilities in its own suite. While features like Firefly and Sensei were designed to address this, it's tough to compete with rivals who embed content creation directly into their platforms—where users are already spending their time and money. The main risk is that customers who once relied on Adobe's ecosystem will start to see these built-in AI tools as 'good enough,' especially for commercial and marketing purposes, and will partially (or even fully) replace the need for Adobe's products. Over the past few years, market reaction has drawn a pretty clear line between the winners and losers in the AI race. The prospect of Adobe growing at only a single-digit rate in 2025—right as the tech sector experiences its biggest disruption since the dawn of the internet—feels underwhelming and puts the company in the 'loser' camp for now. It's the same reason tech players that have prioritized buybacks over heavy investment in AI infrastructure have underperformed so far—Apple (AAPL) being the most notable example among the Magnificent 7. Why Adobe's Defensive Shift Doesn't Mean It's Done Growing Even though Adobe is seemingly losing the AI race, it's important to highlight that despite the shift from high-growth innovator to defensive incumbent, there's still significant value to be created for Adobe shareholders. To start, Adobe's overall business remains extremely healthy—even if it grows at a high single-digit rate—thanks to its very high profitability. Over the past twelve months, the company has reported operating margins of 36%, driven by its recurring software revenue model. If we take a forward growth estimate of roughly 9%—which aligns with analysts' expectations over the next three years—and maintain operating margins around current levels (historically about 35% over the last five years), Adobe would deliver a Rule of 40 score of about 45%. This metric is a common benchmark for SaaS companies, indicating that when the sum of revenue growth and operating margin exceeds 40%, the business strikes a rare and healthy balance between expanding sales and profitability. Put simply, this places Adobe among the 'cash-generating machines' in the software sector, with predictable free cash flow and plenty of room to reinvest or return capital through share buybacks. Finally, trading at 16.5x earnings on a trailing twelve months (ttm) basis—22% below the industry average and nearly 50% below its own five-year historical average—Adobe's valuation looks fairly de-risked. In fact, it appears significantly undervalued given its operational resilience. This is a company that, even in tougher environments, consistently delivers strong cash generation—a point often overlooked when the market is caught up in bull-run euphoria, as it is today. Is Adobe Stock a Buy, Sell, or Hold? Wall Street sentiment on Adobe is mostly bullish. Out of 29 analysts covering the stock in the past three months, 20 are bullish, six are neutral, and just three are bearish. ADBE's average stock price target stands at $478.35, implying an upside potential of about 42% over the coming year. Bear in mind that price targets can fluctuate from week to week. Value Anchored in Adobe's Defense The odds are stacked against Adobe in the short to medium term, as the market has lumped it in with the AI 'losers,' even though operationally the business remains solid and highly profitable. Even if Adobe's investment narrative shifts to that of a defensive incumbent, its strong financial foundation and recurring revenue model provide a powerful buffer against market shocks. More than that, this resilience lets Adobe weather competitive pressures, like the current wave of AI creative tools from Big Tech, without hurting its ability to monetize or deliver long-term returns to investors. When companies with this kind of durability trade at a significant discount, I believe the opportunity to go long is clear. Despite the unfavorable momentum, the upside asymmetry will eventually shine through.
Yahoo
4 days ago
- Business
- Yahoo
Adobe Stock Outlook: Is Wall Street Bullish or Bearish?
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 $144.7 billion, Adobe operates as one of the largest software companies in the world. The software giant has significantly underperformed the broader market over the past year. Adobe's stock has plummeted 37.8% over the past 52 weeks and approximately 25% on a YTD basis, compared to the S&P 500 Index's ($SPX) 19.3% gains over the past year and 8.4% returns in 2025. More News from Barchart Tesla Is Axing Its Dojo Supercomputer Plans. What Does That Mean for TSLA Stock Here? Dear CoreWeave Stock Fans, Mark Your Calendars for August 14 Should You Buy the Post-Preliminary Earnings Plunge in Stock? Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! Narrowing the focus, Adobe has also lagged behind the industry-focused iShares Expanded Tech-Software Sector ETF's (IGV) 31.4% surge over the past year and 8.2% uptick in 2025. Adobe's stock prices dropped 5.3% in the trading session after the release of its mixed Q2 results on Jun. 12. Driven by solid ARR and momentum, the company's overall topline for the quarter grew 10.6% year-over-year to $5.9 billion, setting a record for Q2 and surpassing Street projections. Meanwhile, its non-GAAP net income increased 7.3% year-over-year to $2.2 billion, and benefiting from share repurchases, its non-GAAP EPS surged by 12.9% to $5.06, beating the consensus estimates. Despite these impressive figures, investors have been concerned about Adobe's future growth potential as its remaining performance obligation (RPO), a key indicator of its growth, has remained under pressure. In Q1, its RPO came in at $19.7 billion, which fell short of expectations. Further, its RPO remained steady at $19.7 billion at the end of Q2, making investors jittery. Moreover, investors have also been concerned about the intense competition that Adobe's products are facing from Gen AI tools. For the full fiscal 2025, ending in November, analysts expect Adobe to report a non-GAAP EPS of $16.92, up 13.6% year-over-year. The company has a solid earnings surprise history. It has surpassed the Street's bottom-line estimates in each of the past four quarters. Among the 34 analysts covering the ADBE stock, the consensus rating is a 'Moderate Buy.' That's based on 23 'Strong Buy,' two 'Moderate Buy,' eight 'Hold,' and one 'Strong Sell' rating. This configuration is slightly more optimistic than three months ago, when the stock had 21 'Strong Buy' recommendations. On Jul. 2, Redburn Atlantic analyst Omar Sheikh downgraded ADBE to 'Sell' and lowered the price target from $420 to $280. As of writing, ADBE's mean price target of $493.57 represents a 47.9% premium to current price levels, while its street-high target of $605 suggests a staggering 81.3% upside potential. 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. This article was originally published on
Yahoo
01-08-2025
- Business
- Yahoo
Buy 5 Wide Moat Stocks to Enhance Your Portfolio Returns
The wide moat strategy involves investing in companies that not only lead their industries but are also strategically fortified to maintain dominance in the future. The business models of these companies possess durable competitive advantages that shield them from competitors. This strategy isn't just about short-term gains, but securing a portfolio of stocks that can weather economic storms and continue to deliver stable and predictable returns. This investment strategy focuses on companies with unique strengths such as brand recognition, patent protection, proprietary technology and network effects. These moats ensure long-term profitability and market leadership, making the companies resilient in volatile markets. Here we recommend three Wide Moat stocks with a favorable Zacks Rank. These stocks have solid short-term price upside potential. The stocks are Adobe Inc. ADBE, The Walt Disney Co. DIS, Intuit Inc. INTU, Rollins Inc. ROL and Johnson & Johnson JNJ. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. The chart below shows the price performance of our five picks in the past three months. Image Source: Zacks Investment Research Adobe Inc. Adobe has extensively implemented AI applications across its flagship products, such as Photoshop, Illustrator, Lightroom, and Premiere. Earlier this year, ADBE introduced generative AI-driven Adobe Firefly. Moreover, Adobe Acrobat and Reader AI Assistant help users summarize documents and answer questions, saving time and helping them accomplish tasks faster. Using its new AI-driven cloud-based platform, ADBE is also diversifying into digital marketing services, offering data mining services that help businesses measure page views, purchases and social media sites. Adobe Marketing Cloud enables marketers to deliver personalized web experiences across multiple devices, manage multichannel campaigns and optimize media monetization. ADBE has launched Adobe Express, an application for quick editing effects. Leveraging generative AI, this tool is useful for short-form video content like Instagram Reels. Adobe also launched an AI-based Express app for iOS and Android. Adobe has an expected revenue and earnings growth rate of 9.5% and 12%, respectively, for the current year (ending November 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.1% in the last 30 days. The Walt Disney Co. The Walt Disney is benefiting from strength in Domestic Parks & Experiences revenues driven by growth at domestic parks, Disney Vacation Club and Disney Cruise Line, partially offset by decline at international locations including Shanghai Disney Resort and Hong Kong Disneyland Resort. In Entertainment, DIS expects double-digit percentage operating income growth in fiscal 2025. ESPN continues to reinforce its position as a sports-dominant platform, with the second quarter delivering its most-watched primetime ever and 32% viewership growth in the key 18-49 demographic. DIS has successfully transformed its streaming business from a loss-leader to a profitable growth engine. After reporting its first-ever Direct-to-Consumer (DTC) operating profit in fiscal year 2024, the momentum has accelerated in fiscal year 2025 with second-quarter DTC operating income reaching $336 million. The Walt Disney has an expected revenue and earnings growth rate of 4.1% and 16.30%, respectively, for the current year (ending September 2025). The Zacks Consensus Estimate for current-year earnings has improved 0.3% in the last 60 days. Intuit Inc. Intuit has been benefiting from steady revenues from the Online Ecosystem and Desktop business segments. INTU's strong momentum in Online Services revenues is driven by the solid performance of Mailchimp, payroll and Money, which includes payments, capital and bill pay. Intuit's generative AI-powered "Intuit Assist," provides a financial assistant, enabling personalized insights and recommendations, integrated into products like TurboTax, Credit Karma, QuickBooks, and Mailchimp, aiming to fuel small business and personal financial success. INTU's Credit Karma business is benefiting from strength in Credit Karma Money, credit cards, auto insurance and personal loans. INTU's strategy of shifting its business to a cloud-based subscription model will help generate stable revenues over the long run. Cloud is a flourishing part of the technology space and has been gaining momentum in recent years. Intuit has an expected revenue and earnings growth rate of 11.7% and 13.7%, respectively, for the current year (ending July 2026). The Zacks Consensus Estimate for current-year earnings has improved 4.3% over the last 90 days. Rollins Inc. Rollins stands out with its strategic use of technology and disciplined acquisitions. Tools like BOSS and Orkin 2.0 have redefined ROL's field operations, improved customer service and cut costs. Innovations such as VRM and BizSuite enhance ROL's scheduling and commercial sales, while a strong cash position and zero debt reflect prudent financial management. With 44 acquisitions in 2024 alone and rising dividends, ROL inspires investor confidence and promises long-term growth. Rollins has an expected revenue and earnings growth rate of 10.7% and 12.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last seven days. Johnson & Johnson Johnson & Johnson reported strong second-quarter 2025 earnings results wherein both top and bottom lines beat the Zacks Consensus Estimate. JNJ's Innovative Medicine unit is showing a growth trend, driven by key products like Darzalex, Tremfya and Erleada and continued uptake of new launches, like Spravato, Carvykti and Tecvayli. Though in the MedTech segment, JNJ's sales are being hurt due to headwinds in China and competitive pressure in some categories, the Cardiovascular segment is contributing to growth. Johnson & Johnson expects sales growth in both segments to be higher in the second half than in the first. JNJ is making rapid progress with its pipeline and has been on an acquisition spree lately. Johnson & Johnson has an expected revenue and earnings growth rate of 5.2% and 8.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last seven days. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Johnson & Johnson (JNJ) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report Adobe Inc. (ADBE) : Free Stock Analysis Report Intuit Inc. (INTU) : Free Stock Analysis Report Rollins, Inc. (ROL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-07-2025
- Business
- Yahoo
Adobe's Q3 2025 Earnings: What to Expect
San Jose, California-based Adobe Inc. (ADBE) operates as a global technology company. With a market cap of $157.3 billion, the company operates through three segments: Digital Media, Digital Experience, and Publishing and Advertising. ADBE is set to report its Q3 earnings on Thursday, September 11. Ahead of the event, analysts expect ADBE to report an EPS of $4.21 per share, up 10.5% from a profit of $3.81 per share reported in the year-ago quarter. It has exceeded or met analysts' earnings estimates in each of the past four quarters, which is impressive. More News from Barchart Warren Buffett Warns Inflation Turns Business Into 'The Upside-Down World of Alice in Wonderland' But Weeds Out 'Bad Businesses' Why GOOGL Stock May Be the Market's Next Big Winner Alphabet Posts Lower Free Cash Flow and FCF Margins - Is GOOGL Stock Overvalued? Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. For fiscal 2025, analysts expect ADBE to report an EPS of $16.92, up 13.6% from $14.90 in fiscal 2024. Moreover, in fiscal 2026, its EPS is expected to grow 13.7% year over year to $19.23. ADBE stock has declined 30.3% over the past 52 weeks, underperforming the Technology Select Sector SPDR Fund's (XLK) 22.7% surge and the S&P 500 Index's ($SPX) 18.3% uptick during the same time frame. On July 2, Adobe stock closed down more than 3% after Rothchild & Co. downgraded the stock to "Sell" from "Hold" with a price target of $280. Moreover, analysts remain somewhat bullish about ADBE stock's future prospects, with a "Moderate Buy" rating overall. Among 34 analysts covering the stock, 23 recommend a 'Strong Buy,' two suggest a 'Moderate Buy,' eight advise a 'Hold,' and the remaining analyst gives a 'Strong Sell.' ADBE's mean price of $494.73 implies a premium of 33.4% from its prevailing price level. On the date of publication, Kritika Sarmah 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. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
