A look into Adobe Inc. (ADBE)’s deeper side

Adobe Inc. (NASDAQ: ADBE) stock jumped 1.43% on Friday to $430.59 against a previous-day closing price of $424.54. With 2.74 million shares changed hands, the volume of the stock remained lighter than its average volume of 3.05 million shares. During the session, the Software – Infrastructure company that operates in wider Technology sector, reached to the highest price of $431.15 whereas the lowest price it dropped to was $419.63. The 52-week range on ADBE shows that it touched its highest point at $699.54 and its lowest point at $338.00 during that stretch. It currently has a 1-year price target of $466.24. Beta for the stock currently stands at 1.11.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ADBE was up-trending over the past week, with a rise of 6.71%, but this was up by 12.48% over a month. Three-month performance surged to 1.71% while six-month performance fell -19.23%. The stock lost -31.18% in the past year, while it has lost -24.07% so far this year. A look at the trailing 12-month EPS for ADBE yields 10.24 with Next year EPS estimates of 15.84. For the next quarter, that number is 3.33. This implies an EPS growth rate of -7.60% for this year and 17.18% for next year. EPS is expected to grow by 14.23% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 34.00%.

Float and Shares Shorts:

At present, 472.00 million ADBE shares are outstanding with a float of 463.03 million shares on hand for trading. On Jul 14, 2022, short shares totaled 5.66 million, which was 1.21% higher than short shares on Jun 14, 2022. In addition to Mr. Shantanu Narayen as the firm’s Chairman & CEO, Dr. John E. Warnock serves as its Independent Director.

Institutional Ownership:

Through their ownership of 84.96% of ADBE’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 47.19% of ADBE, in contrast to 37.42% held by mutual funds. Shares owned by individuals account for 0.62%. As the largest shareholder in ADBE with 7.75% of the stake, The Vanguard Group, Inc. holds 36,597,442 shares worth 36,597,442. A second-largest stockholder of ADBE, BlackRock Fund Advisors, holds 24,363,553 shares, controlling over 5.16% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in ADBE, holding 19,103,912 shares or 4.04% stake. With a 2.95% stake in ADBE, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 13,930,908 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.21% of ADBE stock, is the second-largest Mutual Fund holder. It holds 10,458,510 shares valued at 3.83 billion. Invesco QQQ Trust holds 1.45% of the stake in ADBE, owning 6,843,731 shares worth 2.51 billion.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ADBE since 29 analysts follow the stock currently. There are 18 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 6 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ADBE analysts setting a high price target of $549.00 and a low target of $362.00, the average target price over the next 12 months is $463.04. Based on these targets, ADBE could surge 27.5% to reach the target high and fall by -15.93% to reach the target low. Reaching the average price target will result in a growth of 7.54% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ADBE will report FY 2022 earnings on 12/15/2022. Analysts have provided yearly estimates in a range of $14.32 being high and $13.32 being low. For ADBE, this leads to a yearly average estimate of $13.54. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Adobe Inc. surprised analysts by $0.04 when it reported $3.35 EPS against a consensus estimate of $3.31. The surprise factor in the prior quarter was $0.03. Based on analyst estimates, the high estimate for the next quarter is $3.64 and the low estimate is $3.24. The average estimate for the next quarter is thus $3.34.

Summary of Insider Activity:

Insiders traded ADBE stock several times over the past three months with 5 Buys and 5 Sells. In these transactions, 12,312 shares were bought while 5,853 shares were sold. The number of buy transactions has increased to 86 while that of sell transactions has risen to 115 over the past year. The total number of shares bought during that period was 322,227 while 240,809 shares were sold.

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