What To Expect From Adobe’s Earnings Today

Adobe
ADBE
Inc. is scheduled to report earnings after Thursday’s close. The stock hit a record high near $699.54/share in 2021 and is currently trading near $550/share. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:

Earnings Preview

The company is expected to report a gain of $3.98/share on $4.88 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $4.04/share. The Whisper number is the Street’s unofficial view on earnings.

A Closer Look At The Fundamentals

The company’s earnings have grown by double digits in three of the past four quarters. Meanwhile, revenue (a.k.a. sales) have also grown by double digits in three of the past four quarters. Moreover, Return on Equity (R.O.E.) has been over 40% in each of the past four quarters which is a very healthy sign.

A Closer Look At The Technicals

Technically, fell hard in 2022 alongside many other tech stocks. Then it bottomed in late 2022 and has rallied sharply from those lows. The stock is now 3.6% below its 52-week high and around 21% below its record high. Meaning, if the stock gaps up after reporting earnings it can easily keep going. Conversely, the bears want to see the stock gap down after reporting earnings. Recently, Adobe said it will benefit form artificial intelligence so it will be interesting to see if it benefited last quarter and what the company says about A.I. going forward.

Pay Attention To How The Stock Reacts To The News

From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.

Disclaimer: The stock has been featured in my FindLeadingStocks.com report.