Adobe (ADBE) delivered fiscal second-quarter earnings that topped analysts' expectations as sales climbed to a record high, and raised its full-year outlook.
Adobe Inc (NASDAQ:ADBE) raised its full-year revenue and earnings guidance on Thursday after posting record second-quarter results, driven by strong demand for its AI-powered tools across its Creative and Digital Experience platforms. The software giant forecast fiscal third-quarter revenue between $5.875 billion and $5.925 billion, in line with estimates, and projected adjusted EPS between $5.15 and $5.20, above the $5.10 expected by analysts.
Ahead of Adobe's (ADBE) latest earnings report, Tom White takes a look at the chart's setup as shares trade between its 200-day and 50-day moving averages. Adobe hit 52-week lows in April, but shares have climbed nearly 25% higher since.
Adobe's a “prove me” story as investors have anxiety over Generative AI competition. Despite Adobe's strong track-record and high scorecard ranking, its shares have been weak since 2021. AI risk is moderate and management's reorienting its products and pricing to maintain its strong business position.
Adobe's fundamentals have improved, with strong Q1/25 results, robust subscription growth, and consistent margin expansion supporting a cautious 'Buy' rating. Accelerated share buybacks at lower valuation multiples are a smart capital allocation move, enhancing shareholder value while growth opportunities are evaluated. AI presents both opportunities and threats, but Adobe's integration of AI features and high switching costs help maintain its wide economic moat.
Set to report its Q2 results on Thursday, June 12, Adobe (ADBE) stock is down nearly 30% from its 52-week high of $587 a share.
Adobe Inc (NASDAQ:ADBE) remains a ‘Buy'-rated stock according to analysts at Jefferies, who cited the company's strong product relevance, continued innovation, and compelling valuation. Despite recent underperformance, the analysts noted that Adobe's fundamentals and long-term outlook remain intact.
ADBE's second-quarter fiscal 2025 results are likely to reflect strong demand for GenAI solutions amid growing competition and stretched valuation.
Buy Adobe stock on the dip for long-term upside as it expands its creative artificial intelligence efforts.
Adobe is deeply undervalued, with strong margins, robust cash flow, and significant forward EPS growth compared to both tech and consumer peers. AI integration across Creative, Document, and Experience Clouds is driving innovation, record revenue, and recurring subscription growth, positioning Adobe for future upside. Despite risks from AI competition and economic slowdown, ADBE's balance sheet strength, share buybacks, and high profitability make it a compelling investment opportunity.
Beyond analysts' top -and-bottom-line estimates for Adobe (ADBE), evaluate projections for some of its key metrics to gain a better insight into how the business might have performed for the quarter ended May 2025.
Adobe (NASDAQ:ADBE) will announce its earnings on Thursday, June 12, 2025. Historically, the stock has shown negative reactions the day following earnings announcements.