Earnings To Watch: Adobe (ADBE) Reports Q3 Results Tomorrow

Adam Hejl /
2023/09/13 11:49 am EDT

Creative software maker Adobe (NASDAQ:ADBE) will be reporting earnings tomorrow after market close. Here's what investors should know.

Last quarter Adobe reported revenues of $4.82 billion, up 9.8% year on year, in line with analyst expectations. It was a mixed quarter for the company, with revenue, Digital Media ARR (annual recurring revenue), and earnings exceeding expectations. On the other hand, revenue guidance for the next quarter slightly missed analysts' expectations. However, the company did raise full year Digital Media net new ARR and EPS guidance.

Is Adobe buy or sell heading into the earnings? Read our full analysis here.

This quarter analysts are expecting Adobe's revenue to grow 9.81% year on year to $4.87 billion, slowing down from the 12.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $3.98 per share.

Adobe Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates twice over the last two years.

With Adobe being the first among its peers to report earnings this season, we don't have anywhere else to look at to get a hint at how this quarter will unravel for vertical software stocks, but there has been positive sentiment among investors in the segment, with the stocks up on average 2.21% over the last month. Adobe is up 4.62% during the same time, and is heading into the earnings with analysts' average price target of $563.03, compared to share price of $543.79.

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.