Adobe Analysts Split After Strong Q4, Weak 2025 Guidance
Shares of Adobe Inc (NASDAQ:ADBE) tanked in early trading on Thursday, despite the company reporting upbeat fiscal fourth-quarter results.
The company reported its results amid an exciting earnings season. Here are some key analyst takeaways.
Piper Sandler On Adobe
Analyst Brent Bracelin reiterated an Overweight rating, while reducing the price target from $635 to $600.
Adobe reported “solid” results for its fiscal fourth quarter, with revenues beating consensus by $81 million, Bracelin said in a note. Subscription revenues grew by 12.6% year-on-year to $5.4 billion, accelerating from 11.9% in the previous quarter and coming in higher than the average of 11.8% in the previous nine quarters, he added.
The company generated healthy non-GAAP earnings growth of 13% year-on-year for the fourth quarter and 15% for the year, the analyst stated. The stock came under pressure due to management’s fiscal 2025 revenue growth guidance of 8.9%, which implies a deceleration from 10.8% in fiscal 2024, he further noted.
Oppenheimer On Adobe
Analyst Brian Schwartz maintained an Outperform rating, while lowering the price target from $625 to $600.
Although Adobe’s fourth-quarter results were “decent,” Creative Cloud’s net new annualized recurring revenue grew only modestly, Schwartz said. Management’s initial fiscal 2025 outlook was disappointing, he added.
“Specifically, the FY25 net new Digital Media ARR is guided slightly below what the business generated in FY22-24 per annum from less pricing benefits, continuing focus on AI user engagement over monetization growth, negative FX, and conservatism,” the analyst wrote. The takeaway for investors could be that Adobe’s growth is being impacted by “increasing competition in the low-end of the market and a slow monetization path for the AI technologies,” he further stated.
Goldman Sachs On Adobe
Analyst …
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