What Analysts Are Saying About Adobe After Earnings
Adobe Systems Inc. (NASDAQ: ADBE) released fiscal second-quarter financial results after the markets closed on Tuesday. As a result analysts piled into the company after it had a positive report, although views were somewhat mixed.
24/7 Wall St. has compiled some highlights from the earnings report as well as what some key analysts are saying after the fact.
The company had $0.71 in earnings per share (EPS) on a record $1.4 billion in revenue versus consensus estimates from Thomson Reuters that called for $0.68 in EPS on $1.40 billion in revenue. The same period from last year had $0.48 in EPS on $1.16 billion in revenue.
During this quarter, the company reported that deferred revenue grew to $1.68 billion.
The Digital Media segment revenue grew by 26% from last year to a record $943 million, with Creative revenue growing 37% to a record $755 million. Strong Creative Cloud and Document Cloud adoption helped drive Digital Media Annualized Recurring Revenue (ARR) to $3.41 billion exiting the quarter, a quarter-over-quarter increase of $285 million.
Adobe Marketing Cloud achieved record revenue of $385 million that represents year-over-year growth of 18%.
The company issued guidance for the fiscal third-quarter, expecting EPS in the range of $0.69 to $0.79 and revenue in the range of $1.42 billion to $1.47 billion. There are consensus estimates calling for $0.71 in EPS on $1.47 billion in revenue for the coming quarter.
After the earnings were released a few analysts poured into the stock:
- Cowen initiated coverage with an Outperform rating
- Oppenheimer reiterated a Market Perform rating
- Sanford Bernstein reiterated an Outperform rating with a $114 price target
- Credit Suisse reiterated a Neutral rating with a $105 price target
- Goldman Sachs reiterated a Neutral rating with a $105 price target
- JPMorgan reiterated an Overweight rating with a $110 price target
- RBC Capital reiterated an Outperform rating with a $104 price target
- Citigroup has a Buy rating with a $114 price target
- Deutsche Bank reiterated a Buy rating with a $120 price target
- Canaccord Genuity reiterated a Buy rating with a $120 price target
- Rosenblatt Securities has a Buy rating with a $120 price target
Shares of Adobe were last trading down 2.6% at $93.71, with a consensus analyst price target of $111.57 and a 52-week trading range of $71.27 to $100.56.