Adobe’s Q2 Earnings Preview and Analyst Expectations

With a market cap of $157.1 billion, Adobe Inc. (ADBE) is a global technology leader. Established in 1982 and based in San Jose, California, Adobe operates through several segments: Digital Media, Digital Experience, and Publishing and Advertising. Its Creative Cloud program is a flagship service that allows users to create, publish, and promote content effectively. ADBE is set to release its Q2 results on Thursday, June 12.

Expected Earnings Performance

Ahead of the earnings announcement, analysts predict that Adobe will report an adjusted profit of $4.01 per share, reflecting a 10.5% increase from last year’s $3.63 per share. Notably, the company has exceeded analysts’ earnings estimates in each of the past four quarters.

Long-Term Projections

For fiscal 2025, analysts expect Adobe’s adjusted earnings per share (EPS) to reach $16.58, which marks an 11.3% increase compared to $14.90 in fiscal 2024. Additionally, projections for fiscal 2026 suggest a further 13% growth year-over-year, reaching $18.74 per share.

Recent Stock Performance

Over the past year, ADBE shares have decreased by 21.6%, underperforming the S&P 500 Index, which gained 8.7%, and the Technology Select Sector SPDR Fund, which returned 4.2% during the same period.

Impact of Q1 Earnings Release

Following the Q1 earnings release on March 12, ADBE shares fell by 13.9%. Despite reporting a 10.3% year-over-year revenue increase to $5.7 billion, which outpaced street expectations, investor sentiment remained cautious. Adobe’s gross profit rose 10.9% to $5.1 billion, while its non-GAAP operating income increased by 10.1% to $2.7 billion. However, non-GAAP net income for the quarter rose only 8.7% to $2.2 billion, highlighting slower growth.

Furthermore, Adobe’s financial outlook raised concerns, as the company projected weaker sales and earnings for both Q2 and fiscal 2025, causing unease among investors.

Analyst Sentiment

Despite these challenges, the consensus rating for ADBE stock remains positive, with an overall “Moderate Buy.” Out of 33 analysts covering the stock, there are 21 “Strong Buys,” one “Moderate Buy,” 10 “Holds,” and one “Moderate Sell.” The average price target stands at $503.63, suggesting a 35.8% upside from current levels.

On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.