Adobe Inc. ($ADBE) Earnings (Q3 FY22)

Adobe Inc. ($ADBE) Earnings and Opinion: 


Adobe is a company in the Technology sector and operates in the Software-Infrastructure industry. The company operates a diversified software company worldwide. Adobe was founded in 1982 and is currently headquartered in San Jose, California. The company made its IPO on the stock market on August 20, 1986.

Adobe Earnings Results:

  • Revenues of 4.433B beating expectations of $4.430B
  • Operating Income tied with expectations of $1.955B
  • Adjusted EPS of $3.40 beating expectations of $3.33
  • Revenue Guidance missed, but EPS beat
Opinion:
Adobe stock is currently skyrocketing lower, down about 17%. This comes after the company reported earnings before the market opened this morning. The earnings results were not too bad, at all. The guidance just missed on revenues, and the profitability metric (EPS) beat estimates. I think a lot of this falling is credited to the announcement of the merger deal with Figma. They are going to be paying $20B for this merger in a cash and stock deal. These kinds of deals are known to draw a lot of skepticism from investors. I don't think the investors are concerned of the company being acquired, but more so concerned with the $20B Adobe is going to pay to merge with them. From the CFO comments, it seems that the growth is starting to fade for Adobe. They are going to try and merge with Figma to gain more growth and reach out to more markets. As far as valuation goes, P/E ratio sits at 30, which is high. The P/S ratio sits at 8.63, which is also high. Current ratio sits at 1.10, which is a good value. PEG growth is one thing that seems to be lacking, sitting at 2.12. Sales are increasing at decent rates, but given the CFO comments, it could be seeing some slowing down soon. In my opinion, I think Adobe is a great stock to have in your portfolio. The company has established itself well, in the technology sector. They have grown tremendously and have gotten to the point of starting to merge and acquire new companies. It will be interesting to see how this merger plays out, but I think it could benefit the company greatly. I am long Adobe.


Information from Yahoo Finance, finviz, Consensus Gurus, Motley Fool

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