Adobe (ADBE) Q2 Earnings: What To Expect

Jabin Bastian /
2022/06/15 4:59 am EDT
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Creative software maker Adobe (NASDAQ:ADBE) will be announcing earnings results tomorrow afternoon. Here's what investors should know.

Last quarter Adobe reported revenues of $4.26 billion, up 9.14% year on year, in line with analyst expectations. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a slow revenue growth.

Is Adobe buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Adobe's revenue to grow 13.3% year on year to $4.34 billion, slowing down from the 22.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $3.31 per share.

Adobe Total Revenue

The analysts covering the company have been growing increasingly bullish about the business heading into the earnings, with revenue estimates seeing two upwards revisions over the last thirty days. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 1.44%.

Looking at Adobe's peers in the vertical software segment, some of them have already reported earnings results, giving us a hint of what we can expect. Unity (NYSE:U) delivered top-line growth of 36.3% year on year, missing analyst estimates by 0.31% and Autodesk (NASDAQ:ASDK) reported revenues up 18.2% year on year, exceeding estimates by 2.09%. Unity traded down 32.5% on the results, and Autodesk was up 1.39%. Read our full analysis of Unity's results here and Autodesk's results here.

The fears around raising interest rates have been putting pressure on tech stocks and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 10.3% over the last month. Adobe is down 7.44% during the same time, and is heading into the earnings with analyst price target of $548.1, compared to share price of $375.5.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.