Adobe Systems Inc. (ADBE, Financial) will report its financial results for the fourth quarter after market close on Dec. 14.
For the quarter, analysts forecast Adobe will report earnings per share of $1.16, which is the average of estimates ranging from $1.14 to $1.19 and a nearly 29% increase from the prior-year quarter.
Revenue is expected to be $1.95 billion, which is a 21.40% increase on a year-over-year basis. Revenue estimates range between $1.95 billion and $1.98 billion.
The two charts below illustrate Adobe’s sales over the last five quarters (chart one) and over the last five fiscal years (chart two).
Chart one
Chart two
Analysts also provided earnings growth estimates for fiscal 2017 to fiscal 2018 and for the next five years. They forecast Adobe’s EPS will grow 30.60% to $5.51 in full fiscal 2018 and will grow to $15.08 in full fiscal 2022. The latter estimate is based on an average annual growth rate of 29%.
GuruFocus gave Adobe Systems a profitability and growth rating of 8 out of a total of 10. The financial strength rating is 7 out of 10.Â
Adobe is currently trading around $174.31 per share on the Nasdaq stock exchange. For the 52 weeks through Dec. 9, the stock has gained nearly 66%, outperforming the S&P 500 index, which gained 17.86% over the same period.
Source: Yahoo Finance
Valuation
Adobe Systems is trading approximately 6.8% below its 52-weeks high of $186.27 per share. The 52-weeks low is $101.91 per share.
The stock is trading above its 50- and 200-day simple moving average lines.
According to the Peter Lynch chart below, Adobe Systems looks overvalued currently
Adobe has a price-book (P/B) ratio of 10.49, a price-earnings (P/E) ratio of 54.70 and a price-sales (P/S) ratio of 12.63.
The forward P/E ratio is 31.55. When the forward P/E ratio is multiplied by the forecasted 2018 EPS of $5.51, it yields a value of $173.84 per share.
The average target price is $185.27 per share, which is a mean of 30 estimates and represents a 6.3% upside from the current market value per share. The recommendation rating is 1.9 out of 5.
Top institutional holders
Adobe Systems has 492.94 million shares outstanding, of which 89.45% is held by institutions. Among its top institutional shareholders are the Vanguard/Primecap Fund, Fidelity Contrafund Inc. and the Vanguard Total Stock Market Index Fund.
Disclosure: No positions in Adobe Systems.
