Shares of Adobe Systems Inc. (NASDAQ: ADBE) were up handily Friday to a new multiyear high, on day when markets were down in response to oil dropping below $60 a barrel. Adobe is enjoying the afterglow of posting better-than-expected fourth-quarter results late Thursday. And some positive analyst commentary is no doubt helping buoy the stock as well.
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The software maker posted a profit of $73.3 million for its fiscal fourth quarter. Adjusted earnings came in at $0.36 cents per share, on revenue of $1.07 billion. That topped the expectations of the analysts polled by Thomson Reuters, which were for $0.30 per share and $1.06 billion for the period that ended in November.
Adobe also reported that it added 644,000 net new Creative Cloud subscribers in the period, to end the quarter with a total of 3.454 million. Back in the third quarter, Adobe said it added 502,000 net subscribers.
Adobe’s chief financial officer said in the earnings report:
2014 was a pivotal year for Adobe as we completed our business model transition. In 2015 we expect revenue and earnings to grow sequentially every quarter during the year.
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Analysts still seem reluctant to upgrade the stock just yet, but Adobe did see some price targets raised:
- Citigroup reiterated its Buy rating but raised the target price from $89 to $93.
- Credit Suisse reiterated its Neutral rating and raised the price target to $75 from $70.
- Morgan Stanley reiterated its Equal Weight rating and its $70 price target.
- UBS reiterated its Buy rating, but raised the target price from $85 to $87.
The FBR Capital Markets analyst also reiterated the firm’s rating at Market Perform, while raising the target price to $82 from $74. The analyst said:
Adobe reported solid F4Q results as the company beat consensus revenue, margin, and EPS expectations. Even more importantly, the company delivered significant net new subscriber growth upside and saw an acceleration in full suite additions. Adobe now expects to exit FY15 with 5.9 million total subscribers (3.5 million exiting FY14), suggesting demand for the Creative Cloud suite and single apps remains robust
On Thursday, Adobe also announced it will acquire privately held Fotolia for $800 million in cash. The marketplace for royalty-free photos, graphics and videos is to be integrated into Adobe’s Creative Cloud service. The deal is expected to close this quarter.
Adobe shares were up more than 10% in afternoon trading Friday to $76.84, a new 52-week high. The 52-week low is $570.02.
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