Wall Street brokerages remain bullish on Adobe amid ‘conservative’ guidance By Investing.com

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<span>© Reuters. Adobe Systems reports Q4 beat, but shares plunge 6% on weak outlook</span><br />
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<p>(Updated &#8211; December 14, 2023 5:58 AM EST)</p>
<p>Adobe Systems (NASDAQ:) shares dropped more than 6% pre-market Thursday after the company reported FQ4 results and offered guidance.</p>
<p>Q4 EPS came in at $4.27, compared to the consensus estimate of $4.13. Revenue grew 12% year-over-year (up 13% year-over-year in constant currency) to $5.05 billion, compared to the consensus estimate of $5.01B.</p>
<p>Digital Media segment revenue grew 13% year-over-year to $3.72B. Within this segment, Creative revenue climbed to $3.00B, representing a 12% year-over-year growth. Document Cloud generated $721 million in revenue, a 16% increase from the previous year.</p>
<p>Digital Experience segment revenue was $1.27B, representing 10% year-over-year growth. Digital Experience subscription revenue grew 12% year-over-year to $1.12B.</p>
<p>“Adobe drove record revenue of $19.41 billion in FY23 and 17 percent year-over-year EPS growth, with strong momentum across Creative Cloud, Document Cloud and Experience Cloud,” said CEO Shantanu Narayen.</p>
<p>For Q1/24, the company expects EPS in the range of $4.35-$4.40, compared to the consensus of $4.26, and revenue in the range of $5.1-$5.15B, worse than the consensus of $5.19B.</p>
<p>For the full year, the company sees EPS at $17.60-$18.00, compared to the consensus of $18.00, and revenue at $21.3-$21.5B, worse than the consensus of $21.73B. Moreover, Adobe sees a new FY24 ARR at $1.9 billion, below the expected $2.02 billion.</p>
<p>Analysts commented that the results were &#8220;mixed.&#8221;</p>
<p>&#8220;FQ4 was unexpectedly messy especially following a strong Q3 and Analyst Day, which may question the confidence level in growth durability. We’d expect the stock to take a breather here and we are lowering our estimates modestly, flowing in the softer guidance and smaller price tailwinds in FY23,&#8221; analysts said.</p>
<p>Analysts at Jefferies hiked the price target by $40 to $700 per share.</p>
<p>&#8220;ADBE has a history of conservative ARR guide, with final actual beating initial guide by &gt;$200M in 2 out of last 3 FYs and in pre-Covid FY19. FY24 is well positioned to repeat and could exceed $2.1B thanks to many drivers tied to Firefly gen AI adoption (price increases, rollout to more products and geos, enterprise ramp),&#8221; analysts at Jefferies said.</p>
<p>At least several other Wall Street brokerage firms raised their price target on Adobe, including Piper Sandler and Stifel.</p>
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<br /><a href="https://www.investing.com/news/stock-market-news/adobe-systems-reports-q4-beat-but-shares-plunge-6-on-weak-outlook-432SI-3256086">Source link </a></p><p>The post <a href="https://forextraderhub.com/wall-street-brokerages-remain-bullish-on-adobe-amid-conservative-guidance-by-investing-com.html">Wall Street brokerages remain bullish on Adobe amid ‘conservative’ guidance By Investing.com</a> first appeared on <a href="https://forextraderhub.com">Forex Trader Hub</a>.</p>