Adobe stock drops 20% after beating estimates in Q4, with disappointing fiscal 2025 guidance.

From Nasdaq: 2024-12-19 11:23:00

Adobe (ADBE) shares fell 19.8% after Q4 fiscal 2024 results, despite beating estimates. Disappointing fiscal 2025 guidance led to the decline. ADBE faces competition in GenAI space and struggles with AI solutions monetization. Fiscal 2025 revenue expected between $23.30B-$23.55B, with non-GAAP earnings expected between $20.20-$20.50.

Zacks Consensus Estimate for ADBE’s fiscal 2025 earnings is $20.38 per share, down 0.8% over the past 30 days. Revenue estimate is $23.45B, up 9.04% from fiscal 2024. Adobe stock seems overvalued with a Value Score of D and a high price/sales ratio. Portfolio strength may help recovery.

Adobe’s strong portfolio, including Creative Cloud and Document Cloud products, could drive growth. GenAI capabilities and partnerships with major companies are boosting business prospects. Adobe sees increased adoption of its products and services, targeting creative professionals and enterprise clients.

Adobe is gaining enterprise clients for both Creative and Document Cloud segments. Major additions include Alphabet, American Express, Coca-Cola, and more. Investors should consider ADBE’s GenAI focus and innovative portfolio but be cautious of competition and valuation. Zacks Rank #3 suggests a hold for now.

Zacks is naming the top 10 stocks for 2025, with historical performance showing significant gains. Director of Research Sheraz Mian will reveal these picks on January 2. Investors can access these top stock recommendations and free reports on companies like Amazon, Microsoft, and Alphabet.



Read more at Nasdaq: Adobe Stock Slips 20% in a Week: Should You Brace for a Tough 2025?