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."
Sign up for Kiplinger’s Free E-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
-
80-Year Old Dick Durbin, the Senate’s No. 2 Democrat, To Retire After 44 Years in Congress‘In my heart, I know it’s time to pass the torch,’ Senator Durbin said in a statement.
-
Stock Market Today: Stocks Rise on Good VolatilityInvestors, traders and speculators continue to process the "known unknown" of global tariff-and-trade war negotiations.
-
Stock Market Today: Stocks Rise on Good Volatility
Investors, traders and speculators continue to process the "known unknown" of global tariff-and-trade war negotiations.
-
Before You Invest Like a Politician, Consider This DilemmaAs apps that track congressional stock trading become more popular, investors need to take into consideration some caveats.
-
How to Put Together Your Personal Net Worth StatementNow that tax season is over for most of us, it's the perfect time to organize your assets and liabilities to assess your financial wellness.
-
Stock Market Today: Trump Retreats, Markets RejoiceStocks rally, yields soften, the dollar rises, and even beaten-down names enjoy the wages of potential trade peace.
-
Tesla Stock Pops as Elon Musk Promises DOGE Draw BackTesla reported a sharp drop in first-quarter earnings and sales, as the EV maker suffered a backlash to its CEO's political ambitions.
-
Bouncing Back: New Tunes for Millennials Trying to Make ItAdele's mournful melodies kick off this generation's financial playlist, but with the right plan, Millennials can finish strong.
-
Early-Stage Startup Deals: How Do Convertible Notes Work?Some angel investors support early startups by providing a loan in exchange for a convertible note, which includes annual interest and a maturity date.
-
Stock Market Today: Stocks Soar on China Trade Talk HopesTreasury Secretary Bessent said current U.S.-China trade relations are unsustainable and signaled hopes for negotiations.
