Adobe earnings surpass expectationsAdobe outperforms the market with sterling Q4 results.
- Quarterly earnings came out at $3.20 per share, beating estimates of $3.18 per share and making it the fourth quarter in a row the firm has exceeded outlook.
- Adobe posted revenues of $4.11bn, compared to $3.42bn last year.
- The share price has gained around 26% since the start of the year.
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Head in the cloudsA cloud stock massacre by JP Morgan sends prices sinking back down towards Earth.
- JPMorgan analysts downgraded Adobe, Datadog (DDOG), Cloudflare (NET), Zscaler (ZS) (among other software stocks) in its 2022 outlook report, triggering a sharp sell-off.
- Record high inflation has tech investors jittery because it’ll eat into future cash flow projections, which are important for high growth stocks. Adobe (and it's not the only one) is trading at 20 times its revenue, but is it worth it?
- Adobe dropped 6.6% on Tuesday, Cloudflare dipped 9%, Datadog dropped 6.54%, and Zscaler lost 7.84% despite a Nasdaq 100 index listing.
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Adobe on a rollDespite strong Q1 numbers, Adobe drops 1.89% as investors contemplate what the company will look like post-pandemic boom.
Adobe reported revenues of $3.91 billion this week, up 26% from a year ago and ahead of its own forecast of $3.76 billion. Sales were up 26%, while diluted earnings per share stood at $2.61 on a GAAP basis, representing a strong 33% year-over-year growth (38% non-GAAP).
The company saw profit margins steadily rise as the pandemic-induced need to work-from-home heightened demand for its subscriptions and digital segments. Its Digital Media segment (which accounts for more than 72% of total revenues) rose 32% and Digital Experience increased 24% to $934 million. For Q2, Adobe is projecting total revenues of $3.72 billion, and $15.45 billion for the full fiscal year 2021.
As with a lot of broader tech stocks, the firm has been struggling for direction over the past few months, falling 16% over the last six months and 10% over the past month alone, and investors were keen to see a stronger indication of its ability to regain momentum. With these numbers, and annual targets now raised to match, it looks like Adobe could be back on track.