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Analysis of Adobe Inc

Analysis of Adobe Inc

14 September 2022

Adobe: time to rehabilitate last quarter

Adobe is preparing to submit financial statements for the third fiscal quarter of 2022. It will be released next Thursday.

Last time, everything that could have gone wrong went exactly along this trajectory. Firstly, the company released its financial statements exactly when the stock markets were aggressively selling and avoiding risks. Secondly, Adobe then updated its expectations for the whole of 2022, adjusted for changes in the political and economic situation, and investors did not like it.

In general, we can say that in the second quarter, specifically, the financial results were impressive.

This time the average expectations look like this:

  • EPS of $3.33 per share compared to $3.11 for the same period a year earlier.

By the way, in the second quarter of this year, EPS was at $ 3.35. It is very curious what transformations free cash flow has undergone.

The company’s bet on Saas, the subscription model, should justify itself and continue to attract both ordinary users and specialists working on advanced tools. It is interesting to see how the Digital Media sector feels (in the second quarter it grew by 16% YoY, in the third quarter it could expand by 12-14%).

Another pillar of Adobe’s business is flexibility in terms of forming a loyal customer base.

A quarter ago, long-term expectations assumed that securities would reach no higher than $500. This forecast remains valid.

The MACD indicator on the daily chart begins to grow in the negative zone and forms a buy signal. The Stochastic oscillator develops growth in the positive area and confirms the buy signal.

    14 September 2022
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