Adobe Inc. (NASDAQ:ADBE) Second-Quarter Results: Here’s What Analysts Are Forecasting For This Year

It’s been a pretty great week for Adobe Inc. (NASDAQ:ADBE) shareholders, with its shares surging 13% to US$525 in the week since its latest second-quarter results. The result was positive overall – although revenues of US$5.3b were in line with what the analysts predicted, Adobe surprised by delivering a statutory profit of US$3.49 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Adobe

After the latest results, the 35 analysts covering Adobe are now predicting revenues of US$21.5b in 2024. If met, this would reflect a modest 5.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 5.8% to US$11.99. In the lead-up to this report, the analysts had been modelling revenues of US$21.5b and earnings per share (EPS) of US$11.87 in 2024. So it’s pretty clear that, although the analysts have updated their estimates, there’s been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$608, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Adobe, with the most bullish analyst valuing it at US$700 and the most bearish at US$450 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Adobe shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Adobe’s revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2024 being well below the historical 14% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. So it’s pretty clear that, while Adobe’s revenue growth is expected to slow, it’s expected to grow roughly in line with the industry.

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The Bottom Line

The most important thing to take away is that there’s been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. At Simply Wall St, we have a full range of analyst estimates for Adobe going out to 2026, and you can see them free on our platform here..

You can also see our analysis of Adobe’s Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com