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
-
Fish and Chips? More Like Fish and a Side of Customer Confusion and AngerYou expect chips — French fries, actually — to come with your order of fish and chips? Think again. This restaurant could be violating the truth-in-menu laws.
-
What the 2026 Tax Landscape Means for Advisers, From a Financial PlannerThe OBBB's impacts on 2026 are taking shape, amplifying the need for financial advisers' expertise in transforming stability into strategy for their clients.
-
From Vision to Value: A Blueprint for Helping to Build Your Advisory PracticeAs a financial professional, you can draw lessons from Advisors Excel's journey to find ideas, strategies and inspiration for growing your own advisory business.
-
Risk Is On Again, Dow Jumps 381 Points: Stock Market TodayThe stock market started the week strong on signs the government shutdown could soon be over.
-
I'm an Investment Adviser: Here's Why You Should Resist a Zero-Down MortgageWhile it's certainly enticing, a zero-down mortgage comes with significant risks, especially if home values decline or you want to refinance.
-
I'm Embarrassed to Ask: What Is a Life Insurance Trust?Life insurance trusts, particularly irrevocable life insurance trusts (ILITs), can minimize estate taxes and protect your heir's inheritance.
-
Are Your Employees Quietly Cracking? How to Repair the Cracks Before Everything BreaksSome employees who are unable to change jobs due to economic conditions are doing only the bare minimum, leading to decreased work quality and team morale.
-
Headed for the Retirement Red Zone? This Eight-Step Game Plan Helps to Avoid FumblesThese strategies help safeguard your nest egg and ensure long-term financial success during the five years before retirement and the five years after.
