Adobe Systems Inc: Why ADBE Stock is Going Crazy Today
3rd-Quarter Numbers Send ADBE Stock Soaring
Adobe Systems Incorporated (NASDAQ:ADBE) reported its third-quarter results Tuesday and investors couldn’t be more excited. Adobe, the 34-year tech veteran, has mastered the art of reinventing itself and the results are for everyone to see. Over the last year, ADBE stock has gone up by about 24%.
Adobe Incorporated, the “digital experience solutions” company, reported a quarterly earnings of $0.75 per share, beating the consensus estimates of $0.72 per share. The company reported revenues of $1.46 billion, which represents a growth of 20% year-over-year.
Adobe, known for its “Flash” player and “Photoshop,” remains a market leader, with strong demand for its digital media products. CEO Shantanu Narayen said that the company was ahead of its competitors, and that its leadership in cloud-based content and data platforms made Adobe a mission-critical partner to the world’s biggest brands.
One of the best business segments for the company has been “Digital Media”. The Digital Media segment revenue was a record $990.0 million, with the “Creative” segment’s revenue posting 39% year-over-year growth at $803.0 million. This should be a big boost for ADBE stock. (Source: “Adobe Reports Record Revenue,” Adobe Systems Incorporated, September 20, 2016.)
Early this month, the company revealed a series of innovations in “Adobe Creative Cloud” and “Adobe Marketing Cloud” at the IBC conference in Amsterdam. According to Bill Roberts, senior director of product management, the aim of the company is to help video creators of all kinds to create their best work. (Source: “Adobe Unveils New Virtual Reality, Character Animation and 3D Innovations at IBC 2016,” Adobe Systems Incorporated, September 6, 2016.)
The company has just announced the public beta of their new “Adobe Stock Contributor Site,” which lets content creators present their works to millions of customers directly inside Creative Cloud applications such as “Photoshop CC,” “Illustrator CC” and “Indesign CC.” (Source: “Adobe Stock adds contributor site and integration, updates Lightroom,” Imaging Resource, September 20, 2016).
The Bottom Line for ADBE Stock
The future looks bright for Adobe as it transitions to a cloud-based model and explores the highly lucrative Augmented Reality (AR) and Virtual Reality (VR) space. The company’s management is expecting another record quarter in Q4, based on its market leadership and strong execution capabilities. With great performance, a strong balance sheet, and exciting future growth areas, ADBE stock is likely to maintain its growth.
