Adobe's stock plunges by 13% following a discouraging quarterly revenue guidance

On Friday morning, Adobe’s shares experienced a 13% decline following the company’s announcement of first-quarter results surpassing expectations, yet coupled with a modest quarterly revenue forecast.

Adobe Stock Tumbles After Reporting Record Quarterly Revenue, Soft Guidance — jomotoday.com

The design software company surpassed analysts’ expectations with adjusted earnings per share of $4.48, exceeding the anticipated $4.38, as reported by LSEG (formerly Refinitiv). Its revenue of $5.18 billion also outperformed estimates of $5.14 billion.

For the upcoming quarter, Adobe forecasts adjusted earnings per share in the range of $4.35 to $4.40, slightly lower than the anticipated $4.38, with revenue expected to be between $5.25 billion and $5.30 billion, just under the estimated $5.31 billion. Additionally, the company announced a $25 billion share buyback.

Adobe recently introduced an artificial intelligence assistant for its Reader and Acrobat applications, aimed at aiding users in digesting information from lengthy PDF documents.

Bank of America analysts reduced their price target for Adobe shares from $700 to $640 but maintained their buy rating, citing optimism about Firefly, Adobe’s generative AI image creation tool.

Barclays revised its price target for Adobe shares downward to $630 from $700 while upholding an overweight rating, expressing confidence in the stock’s potential for recovery, particularly noting the strength in Creative Cloud despite pricing concerns.

Morgan Stanley analysts maintained their overweight rating and $660 price target for Adobe stock, suggesting that patience may be necessary given a smaller-than-expected beat in Digital Media Net New ARR, though they anticipate improvement in the narrative with the increasing monetization avenues for GenAI and new monetizable solutions in the latter half of 2024.

Disclaimer:
This content is AI-generated using IFTTT AI Content Creator. While we strive for accuracy, it’s a tool for rapid updates. We’re committed to filtering information, not reproducing or endorsing misinformation. – Jomotoday for more information visit privacy policy