Adobe is set to report Q2 earnings with strong growth expected, but stock underperformed sector

From Nasdaq: 2025-06-10 11:13:00

Adobe is set to report its second-quarter fiscal 2025 results on June 12 with projected revenues between $5.77 billion and $5.82 billion and non-GAAP earnings between $4.95 and $5 per share. The Zacks Consensus Estimate for revenues is $5.79 billion, with earnings expected to grow by 10.71% from the year-ago quarter. Adobe’s earnings have beaten estimates in the last four quarters.
Prior to the announcement, Adobe expects Digital Media segment revenues to be between $4.27 billion and $4.30 billion, while Digital Experience segment revenues are anticipated to be in the range of $1.43-$1.45 billion. Adobe’s strong Generative AI (GenAI) portfolio and partnerships with Amazon, Microsoft, and Alphabet are expected to drive growth in the second quarter.
Adobe’s stock has underperformed the Computer and Technology sector and Computer Software industry, losing 6.4% year-to-date. The Value Score suggests a stretched valuation for ADBE shares, trading at a forward 12-month price/sales ratio of 7.22X compared to the sector’s 6.37X.
Adobe’s strong portfolio and rich partner base, including Amazon and Google, are key drivers for the company. The introduction of the Firefly app and partnerships with major platforms like Microsoft Edge and Google Chrome are expected to boost Adobe’s growth. However, competition in the GenAI space and a lack of monetization of AI solutions pose challenges for Adobe.
Despite strong demand for its products, competition in the GenAI space and slow monetization of AI solutions have affected Adobe’s performance. With a Zacks Rank #3 (Hold), it may be prudent to wait for a favorable time to invest in Adobe stock. Check out Zacks’ complete list of top stock picks for more investment opportunities.
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For more information on Adobe Inc. (ADBE), Amazon.com, Inc. (AMZN), Microsoft Corporation (MSFT), and Alphabet Inc. (GOOGL), visit Zacks Investment Research for free stock analysis reports and insight. This article was originally published on Zacks Investment Research’s website.



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