What's Going On With Adobe Stock Friday

Adobe Inc ADBE stock traded higher Friday after it disclosed better-than-expected Q2 results and strong EPS guidance.

Adobe said second-quarter revenue increased 10% year-over-year to $4.82 billion, which beat the consensus estimate of $4.43 billion. The creative software company reported quarterly adjusted earnings of $3.91 per share, which beat estimates of $3.79 per share.

Segments: Subscription revenue grew by 11% to $4.5 billion.

Digital Media segment revenue was $3.51 billion, up 10% Y/Y. Creative revenue grew to $2.85 billion, up by 9% Y/Y. Document Cloud revenue was $659 million, up by 11% Y/Y.

The gross margin expanded by 41 bps to 88.1%. Adobe generated $2.14 billion in operating cash flow and held $6.6 billion in cash and equivalents.

Digital Experience segment revenue was $1.22 billion, up 12% Y/Y. Digital Experience subscription revenue was $1.07 billion, up 11% Y/Y.

Outlook: Adobe expects third-quarter revenue of $4.83 billion - $4.87 billion versus estimates of $4.86 billion. It expects third-quarter adjusted earnings of $3.95 - $4 per share versus estimates of $3.89 per share.

The company expects full-year revenue of $19.25 billion - $19.35 billion versus estimates of $19.3 billion. It sees full-year adjusted earnings of $15.65 - $15.75 per share versus estimates of $15.50 per share.

Piper Sandler raised the price target on Adobe from $500 to $572. Analyst Brent Bracelin maintained an Overweight rating.

RBC Capital increased the price target on Adobe from $460 to $555. Analyst Matthew Hedberg maintained an Outperform rating.

Wells Fargo boosted Adobe's price target from $525 to $600. Analyst Michael Turrin maintained an Overweight rating.

Morgan Stanley raised the price target from $470 to $510. Analyst Keith Weiss maintained Adobe with an Equal-Weight.

Mizuho raises the price target from $450 to $520. Analyst Gregg Moskowitz maintains Adobe with a Neutral.

The session volume surged to 5.2 million vs. the 100-day average of 3.6 million.

Price Action: ADBE shares traded higher by 3.23% at $506.80 on the last check Friday.