Adobe Systems Inc. (ADBE, Financial) will release its financial results for the first quarter of fiscal 2018 on Thursday after market close.
For the quarter, 28 analysts have estimated that Adobe’s earnings will range between a low of $1.41 per share and a high of $1.51 per share. The average of this range is $1.44, which represents a 53.2% increase from the first quarter of fiscal 2017.
Source: Yahoo Finance
Earnings are backed on average revenue of $2.05 billion. This is a mean of a 26 estimates ranging from $2.04 billion to $2.08 billion. On a year-over-year basis, the average forecast represents a 21.7% growth.
Source: Yahoo Finance
Adobe is a company with a solid financial position. As of the most recent quarter, the company had approximately $5.82 billion in cash on hand and securities, or $11.84 per share and total debt of about $1.88 billion. The equity to total debt ratio is 22.25% versus an industry median of 27%. The current ratio is 2.06 versus an industry average of 1.96.
The company is a formidable cash flow generator: Over the last trailing 12 months, Adobe produced a cash flow of approximately $2.91 billion from operations, of which nearly 80% has been reinvested business growth.
GuruFocus assigns a financial strength rating of 7 out of a total of 10. While concerning the ability of the company to generate and grow the profit, Guru Focus rates it with a value of 9 out of 10.
Analysts also forecast Adobe’s earnings to grow based on an annual average 23.75% rate over the next five fiscal years.
The stock is currently trading at $221.70 per share and has a market capitalization of $109.15 billion. The price-book ratio is 12.85 times versus an industry average of 3.25 times, the price-sales ratio is 15.18 times versus an industry average of 2.57 times and the price-earnings ratio is 65.26. The industry has an average PE ratio of 27.61 times.
According to GuruFocus, Adobe Systems has 493.33 million shares outstanding. The stake held by institutions is 56.4% and that one possessed by insiders is 0.36%.
As of Dec. 30, 2017, FMR, LLC holds 7.24% of Adobe’s total shares outstanding, the Vanguard Group, Inc. holds 7.16% and Blackrock Inc. owns 6.65%.
(Disclosure: I have no positions in any stock mentioned in this article.)
