Shares of Adobe Systems Inc. ADBE hit a new 52-week high of $92.50 on Nov 25, eventually closing at $91.77. The company returned 24.6% in the past one year and approximately 26.2% year-to-date. Average volume of shares traded over the last three months was roughly 3,452K.
What is Driving Adobe Systems?
One of the largest software companies in the world, Adobe Systems’ massive customer base provides it with a distinct competitive edge. We believe that the company is being driven by continuous innovation in its Creative Cloud and Marketing Cloud businesses.
After the successful transition from traditional license to subscription-based services, Adobe wants to make a presence in cloud-related software areas like documents and marketing. In this regard, the company recently introduced significant features and a number of updates for its Document Cloud (DC).
Last month, the company announced a partnership with Dropbox Inc., a file backup service that offers cloud-based file management, storage systems and client software.
The integration of Dropbox into DC is aimed to make it easier for people and organizations to work with files on the go. With more than 18 billion PDF files stored in Dropbox, the alliance will enable Adobe Acrobat DC and Adobe Acrobat Reader users to easily access and work on files stored on Dropbox Basic, Pro and Business accounts from Adobe apps.
Recently, the software developer also issued the guidance for fiscal 2016. Adobe expects revenues of $5.7 billion and adjusted earnings of $2.70 per share for the year ending Nov 2016. Also, it expects Marketing Cloud bookings to increase 30% and Digital Media annualized recurring revenues (ARR) to jump 25%. Along with this, Adobe stated that the total addressable market will grow to around $48 billion by 2018.
Additionally, Adobe Systems delivered an average positive earnings surprise of nearly 12.6% over the trailing four quarters. The company’s solid market position, its compelling product lines (including CS cloud initiative and digital media products), strong revenue growth, continued innovation and strong long-term growth potential position it favorably.
The company expects to report third-quarter results on Dec 10.
Adobe Systems currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Some well-ranked stocks in the same space are Citrix Systems, Inc. CTXS, Datawatch Corporation DWCH and Fleetmatics Group PLC FLTX. All the stocks sport a Zacks Rank #1 (Strong Buy).
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