Zacks Research Optimistic About Adobe's Q1 Earnings

On January 2, 2025, it was reported that Adobe Inc. (NASDAQ:ADBE – Free Report) has received a favorable update regarding its earnings outlook from Zacks Research. According to a research note published on December 30th, analysts there have revised their estimates for Adobe’s earnings per share (EPS) for the first quarter of 2025. The new expectation is set at $4.10 per share, an increase from the earlier estimate of $4.04. This reflects Zacks Research's growing confidence in Adobe's performance.

Moreover, the consensus for Adobe’s full-year earnings stands at $16.73 per share. Zacks also provided estimates for subsequent quarters, predicting a Q2 2026 EPS of $4.69 and FY2027 earnings at $21.64 EPS.

Analyst Ratings and Target Price Adjustments

In addition to the revisions made by Zacks Research, multiple other financial institutions have evaluated Adobe's stock. Royal Bank of Canada reduced its target price on Adobe's share from $610.00 to $590.00 while maintaining an “outperform” rating. Similarly, UBS Group lowered its price target from $550.00 to $525.00 and issued a “neutral” rating on December 12th. Citigroup also adjusted its forecast, bringing down the target from $616.00 to $590.00 and suggesting a “neutral” stance. Other firms such as Sanford C. Bernstein and TD Cowen have also made adjustments to their ratings and price expectations for Adobe.

Overall, analysts are divided in their assessments: two analysts have rated the shares as a sell, eight have issued hold ratings, while seventeen have recommended a buy rating. Furthermore, two analysts have given a strong buy rating. The general consensus rating for the stock is categorized as a “Moderate Buy,” with an average target price of $584.88, according to MarketBeat data.

Current Stock Performance

As of January 2, 2025, Adobe's stock opened at $444.68. Financial metrics indicate that it has a current ratio of 1.11, a quick ratio of 1.11, and a debt-to-equity ratio of 0.28. With a market capitalization of $195.75 billion, Adobe exhibits a P/E ratio of 35.86 and a P/E/G ratio of 2.51. The stock has experienced fluctuations in the past year, ranging from a low of $432.47 to a high of $638.25. Its moving averages over the past 50 and 200 days are $492.21 and $521.97, respectively.

Recent Earnings Report

Adobe's last earnings report was released on December 11th, where the company reported earnings of $4.81 per share, surpassing the consensus estimate of $4.67. Quarterly revenue was recorded at $5.61 billion, edging past analyst expectations of $5.54 billion. Notably, Adobe achieved a net margin of 25.85% and a return on equity of 45.22%, with a year-over-year revenue growth of 11.1%. In the same quarter last year, Adobe's EPS stood at $3.52.

Investor Activity

Institutional trading activity shows that several institutional investors have recently adjusted their positions in Adobe. For example, Public Sector Pension Investment Board increased its stake by 12.2% in the third quarter, now holding 19,322 shares valued at $10,005,000. Other institutions like GAMMA Investing LLC and Jacobs Levy Equity Management Inc. also made significant acquisitions, reflecting growing institutional interest in Adobe.

Insider Transactions

Recently, there have been insider activities reported, including Director Amy Banse's sale of 606 shares at an average price of $550.00. This transaction decreased her position by 1.81%. Similarly, CAO Jillian Forusz sold shares, decreasing her holdings by nearly 20%. In total, insiders sold 3,293 shares valued at approximately $1.68 million over the last quarter, and insider ownership currently stands at 0.15%.

Company Overview

Adobe Inc. operates globally as a diversified software company. It provides a variety of services through three main segments: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment includes products and services that enable users to create, publish, and manage content effectively, along with the Document Cloud platform for document services.

Adobe, Earnings, Stocks