Adobe Systems (ADBE) was moving early during Friday morning’s pre-market trading, and that manifested itself in an almost 6% gain when trading opened. This was the result of the company coming ahead of Wall Street expectations during the 4th quarter.
The company reported adjusted earnings per share of $3.60, which beat the $3.50 that analysts were anticipating. And that’s not the only positive news for ADBE investors. The company grew revenue by about 10% over the 2021 4th quarter – up to $4.53 billion.
On top of this, Adobe’s cash flow from operations hit a record high of $2.33 billion. This allowed management to repurchase 5 million shares of Adobe stock during the quarter. And, bringing the year to a close, Adobe reported just under $14 billion in annual recurring revenue for its digital media segment – adding an additional $576 million to this figure in the 4th quarter alone.
Looking ahead to next year, Adobe executives went light on revenue guidance. Wall Street is expecting $19.4 billion, while Adobe executives expect to fall just shy of that figure in 2023. They’re forecasting revenue of $19.1-$19.3 billion. Similarly, the full-year non-GAAP EPS guidance is going to come just under analyst consensus at $15.30 (compared to $15.25).
This light guidance has some investors – and potential investors – concerned. Is this concern warranted? We think not – as a matter of fact, we found three reasons to like Adobe stock when taking a look through the VectorVest stock market analysis software.
ABDE Has Good Upside Potential and Timing, With Very Good Safety
The VectorVest system allows you to effortlessly and confidently navigate the stock market, winning more trades with less work. It all comes down to the proprietary stock rating system we’ve developed. Now, you can gain all the insights you need to uncover opportunities and make informed, emotionless decisions with just three ratings: relative value (RV), relative safety (RS), and relative timing (RT).
Interpreting these ratings is quick and easy as they sit on a scale of 0.00-2.00, with 1.00 being the average. Pick stocks with above-average ratings to win more trades! But to make things even easier, VectorVest even gives you a clear buy, sell, or hold recommendation based on these ratings. As for ABDE, here’s the current situation:
- Good Upside Potential: The long term price appreciation potential for ADBE stock looks good – and the RV rating of 1.11 reflects that. This indicator is far superior to a simple comparison of price and value because it’s projected three years out while taking AAA corporate bond rates and risk into account.
- Very Good Safety: Relative safety is an indicator of risk, and this is where ADBE stock shines brightest. The RS rating of 1.32 is very good. It’s calculated from a deep analysis of the company’s financial consistency and predictability, debt-to-equity ratio, and business longevity.
- Good Timing: It appears ADBE has a positive price trend as well, and the good RT rating of 1.18 validates that sentiment. This rating is based on the direction, dynamics, and magnitude of a stock’s price movement. It’s taken day over day, quarter over quarter, and year over year to paint the full picture for investors.
These three ratings add up to an overall VST rating of 1.21, which is good on a scale of 0.00-2.00. Does that mean now is the time to buy ADBE stock? The answer you’re searching for is waiting to be discovered – just get a free stock analysis through VectorVest and eliminate guesswork or emotion from your decision-making for good!
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VectorVest advocates buying safe, undervalued stocks, rising in price. As for ADBE, it is slightly overvalued but has good upside potential and timing, paired with very good safety.
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