Adobe (ADBE) stock is lower out of the gate Thursday after the software giant reported a top- and bottom-line beat for its fiscal 2024 fourth quarter but issued guidance for fiscal 2025 that came up short of expectations.
In the three months ended November 29, Adobe's revenue increased 11.1% year over year to $5.6 billion. Its earnings per share (EPS) were up 12.6% from the year-ago period to $4.81.
"Adobe delivered record fiscal 2024 revenue, demonstrating strong demand and the mission-critical role Creative Cloud, Document Cloud and Experience Cloud play in fueling the artificial intelligence (AI) economy," said Adobe CEO Shantanu Narayen in a statement. "Our highly differentiated technology platforms, rapid pace of innovation, diversified go-to-market and the integration of our clouds position us for a great year ahead."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The company's results topped analysts' expectations. Wall Street was anticipating revenue of $5.5 billion and earnings of $4.67 per share, according to Yahoo Finance.
For its new fiscal year, Adobe said it expects to achieve revenue in the range of $23.3 billion to $23.55 billion and earnings per share of $20.20 to $20.50. This is just shy of the $23.8 billion in revenue and $20.53 in earnings per share Wall Street is expecting.
For the first quarter of fiscal 2025, Adobe said revenue should arrive in the range of $5.63 billion to $5.68 billion and earnings per share of $4.95 to $5. This compares to analysts' forecast for revenue of $5.7 billion and earnings of $4.94 per share.
"Adobe's strategy, AI innovation and massive cross-cloud opportunity position us well for 2025 and beyond," said Dan Durn, chief financial officer at Adobe, in a statement.
Is Adobe stock a buy, sell or hold?
Adobe has been a long-term outperformer, but shares have struggled in 2024, and are down 23% for the year to date. Still, Wall Street is bullish on the tech stock.
According to S&P Global Market Intelligence, the average analyst target price for ADBE stock is $593.53, representing implied upside of over 20% to current levels
Financial services firm Oppenheimer maintained its Outperform rating (equivalent to a Buy) following Adobe's earnings release, but lowered its price target to $600 from $625.
"Adobe reported decent fiscal fourth-quarter results, though net new Creative Cloud annual recurring revenue only shows modest growth (partially from a tough year-over-year comparison with Acrobat), and initiated fiscal 2025 guidance below expectations," says Oppenheimer analyst Brian Schwartz.
He goes on to say that investors may see increased competition and slow monetization of AI offerings as hindering Adobe's growth and guidance.
Related Content
-
A Fidelity Fund Misses Out on Soaring Bank StocksThe Fidelity International Growth Fund has outperformed over the long term, but its lagging exposure to bank stocks has weighed on more recent returns.
-
I'm 58 and just sold some stock to lock in gains. I made a killing, but will I have a big tax bill?We ask financial planning experts for advice.
-
A Fidelity Fund Misses Out on Soaring Bank Stocks
The Fidelity International Growth Fund has outperformed over the long term, but its lagging exposure to bank stocks has weighed on more recent returns.
-
More Than Money: The Hidden Toll of Financial Abuse of Older AdultsFinancial abuse from schemes involving tech support, government impostors, false sweepstakes, grandchild hoaxes and online shopping issues can cause thousands of dollars in losses.
-
I'm a Financial Planner: Here Are Three High-Impact Ways to Make a Difference With Your DollarsThe world often feels out of control, but here are three ways to use your money — through investments, charitable giving and political donations — to help create a more just and sustainable future.
-
Stocks Slide to Start September: Stock Market TodaySeasonal trends suggest tough times for the stock market as we round into the end of the third quarter.
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
Where is the Foreign Dividend Boom Headed?It's been a golden six months for foreign dividend stocks, but can any be relied on for predictable income going forward? Here are some options.
-
The Unsung Hero of Aisle 5: A Tale of Forgotten Change and Compassion at the SupermarketThis supermarket manager went above and beyond to help when a child forgot her change at the checkout counter. You might be surprised at some of the complications that supermarkets face when it comes to customers' forgotten change.
-
Train, Integrate, Retain: A Strategic Playbook for Adviser OnboardingsBuild a thriving practice by training new advisers with clear goals, structured processes and consistent mentorship for strong team growth.
