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Adobe Stock Price Is Set to Cross $300 Mark Despite Downside Guidance

Adobe Stock Price Is Set to Cross $300 Mark Despite Downside Guidance
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Adobe (NASDAQ: ADBE) stock price surged more than 25% year to date amid strong financial numbers. The stock price has also breached $300 mark for the first time in history during the recent bullish trend. Adobe stock price, however, recently retreated slightly from its all-time high of $313.

ADBE Adobe Inc. daily Stock Chart

Its shares are currently trading around $290. The retreat of its stock price is only due to lower than expected guidance for the final quarter. Despite lower guidance, the stock price is likely to receive support from revenue growth and valuations.

Its third-quarter revenue has reached a record level of $2.83 billion. This represents 24% growth from the past year quarter. Digital Media segment revenue was standing around $1.96 billion in Q3, up 22% year-over-year. On the other hand, Digital Experience segment revenue jumped 34% year over year to $821 million.

Customers across every industry continue to rely on Adobe to run their businesses, transform how they work, and bring their creative ideas to life as reflected in our record Q3 results,” said Shantanu Narayen, president and CEO, Adobe. “We’re excited about the opportunities in front of us and confident in our ability to drive strong top-line and bottom-line growth.”

The company expects to generate 20% revenue growth in the final quarter of this year.

Its strategy of reducing outstanding shares along with investments in high margin assets are supporting earnings potential. The company has repurchased 2.6 million shares during the latest quarter. It expects to reduce a similar number of shares in the final quarter.

It anticipates full year earnings per share in the range of $7, higher from last year earnings of $5 per share.

Despite the recent increase in stock price, the significant growth in financial numbers would support its valuations. Therefore, Adobe stock price is well set to extend the upside momentum in the coming days. Share buybacks would also support upside momentum.

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siraj sarwar

Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.

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