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Why Adobe Systems (ADBE) Dipped More Than Broader Market Today

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Adobe Systems (ADBE - Free Report) closed at $590.33 in the latest trading session, marking a -1.15% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 0.08%. Elsewhere, the Dow gained 0.16%, while the tech-heavy Nasdaq lost 0.22%.

Coming into today, shares of the software maker had gained 8.83% in the past month. In that same time, the Computer and Technology sector gained 2.9%, while the S&P 500 gained 1.42%.

Analysts and investors alike will be keeping a close eye on the performance of Adobe Systems in its upcoming earnings disclosure. The company's earnings report is set to go public on December 13, 2023. It is anticipated that the company will report an EPS of $4.13, marking a 14.72% rise compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $5.01 billion, indicating a 10.65% growth compared to the corresponding quarter of the prior year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $15.93 per share and revenue of $19.37 billion, indicating changes of +16.19% and +10.01%, respectively, compared to the previous year.

Investors should also take note of any recent adjustments to analyst estimates for Adobe Systems. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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 remained stagnant within the past month. Adobe Systems is currently sporting a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that Adobe Systems has a Forward P/E ratio of 37.5 right now. This valuation marks a premium compared to its industry's average Forward P/E of 27.11.

We can additionally observe that ADBE currently boasts a PEG ratio of 2.77. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. ADBE's industry had an average PEG ratio of 2.4 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 78, finds itself in the top 31% echelons of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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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