Adobe Systems Shares Are Falling Regardless of Good Quarterly Report

Adobe Systems Shares Are Falling Regardless of Good Quarterly Report

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Adobe Systems presented the results of Q1 of financial 2021. Today I’m showing you cheerful results presented in the report and the market reaction to the statistics, as well as forecasts for the future.

Adobe report exceeded expectations

On March 24th, the US company specializing in developing and selling software published its report for the first three months of financial 2021. As you know, the first quarter ended on March 5th.

The corporation surprised analysts with record profits, exceeding Wall Street expectations. For example, the return on stock grew by 38% compared to the last year’s statistics and amounted to 3.14 USD. Analysts had promised 2.78 USD.

About the quarterly report in detail

  • Revenue – 3.91 billion USD, +26.3%
  • Return on stock – 3.14 USD, +38.3%
  • Net profit – 1.52 billion USD, +36.9%
  • Operational expenses – 2 billion USD, +17.7%
  • Digital Media revenue – 2.86 billion USD, +32%
  • Digital Experience revenue – 934 million USD, +24%.

What are the forecasts of Adobe Systems?

In the company, they expect the revenue to reach 3.72 billion USD and the return on stock – 2.81 USD in the nearest three months. As for the Digital Media revenue, it should grow by about 21% against the results of Q1, 2020, and the Digital Experience revenue – by 18%.

As for the plans for the whole financial year, they are as follows: revenue – 15.45 billion USD, return on stock – 11.85 USD, the Digital Media and Digital Experience revenues – plus 22% and 20%, respectively.

Adobe Systems shares and the reactions of analysts

On March 24th, when the report was published, the shares of Adobe Systems (NASDAQ: ADBE) fell by 1.89%, from 460.2 to 451.51 USD each. The next trading session resulted in an already less slump – by 0.12%, to 450.99 USD.

Morgan Stanley analysts lifted the target price of Adobe Systems shares from 560 to 575 USD and its rating – to “overweight”. Goldman Sachs experts lifted the estimation to 523 USD, Jefferies – to 610 USD, Griffin Securities – to 597 USD, and the Royal Bank of Canada – to 575 USD.

As you remember, since the beginning of the year, the share price of the company has dropped by 9.8%, from 500.12 to 450.99 USD.

Summing up

Adobe Systems' quarterly report exceeded the expectations of Wall Street experts. The company not only boasted record profits but also voiced quite ambitious plans for the current quarter and the whole financial year.

Such a strong report pushed the analysts of many large financial organizations to increase the ratings and estimations of the company’s shares. The quotations, however, demonstrated a minor decline.

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