Adobe Q4 Earnings Preview: Analyst Says Investors May Be Missing Healthy Subscriber Growth

Adobe Inc ADBE could highlight its strong subscriber revenue and growth when the company reports fourth-quarter results after market close Wednesday.

Earnings Estimates: Analysts expect Adobe to report fourth-quarter revenue of $5.54 billion, up from $5.05 billion in last year's fourth quarter, according to data from Benzinga Pro.

The company has beaten analyst revenue estimates in seven straight quarters and nine of the last 10 quarters overall.

Analysts expect the company to report earnings per share of $4.65 in the fourth quarter, compared to $4.27 in last year's fourth quarter. The company has beaten analyst estimates for earnings per share in 11 straight quarters.

Guidance from the company sees fourth-quarter revenue coming in a range of $5.50 to $5.55 billion and earnings per share coming in a range of $4.63 to $4.68.

What Analysts Are Saying: Adobe could offer a compelling risk-reward profile ahead of 2025, Piper Sandler analyst Brent Bracelin recently said.

The analyst reiterated an Overweight rating and $635 price target on the stock in the note.

Bracelin said with shares down year-to-date, the stock could go from laggard to leader.

Concerns of threats on Adobe's business from artificial intelligence could be overshadowing healthy subscription growth trends, the analyst added.

The analyst said the earnings report could show the durability of subscription growth and high operating margins.

Adobe Express Mobile is also attracting new users with quarterly downloads over 10 million, Bracelin said.

Here are other analyst ratings on Adobe and their price targets:

Citigroup: Maintained Neutral rating, lowered price target from $616 to $590
BMO Capital: Maintained Outperform rating, lowered price target from $600 to $580
RBC Capital: Reiterated Outperform rating, price target $610

Key Items to Watch: Subscription revenue and strength will be one of the biggest areas to watch, as shared by Bracelin above.

Investors and analysts will also be looking to hear any comments on how AI is impacting the company and what Adobe is doing to offset this competitive threat.

Updates on new products and their initial reaction will also be an item to watch.

With this being the fourth-quarter financial results, analysts and investors will also be waiting to see if Adobe shares guidance for the next fiscal year.

ADBE Price Action: Adobe stock is down 0.3% to $545.23 on Wednesday versus a 52-week trading range of $433.98 to $638.25. Adobe stock is down 6% year-to-date in 2024.

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