A wise investment decision involves buying well-performing stocks at the right time while selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bullish run.
Adobe Systems Incorporated (NASDAQ:ADBE) stock has performed extremely well so far this year and has the potential to carry on the momentum in the near term. Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add ADBE stock to your portfolio.
A look at the Adobe stock price trend reveals that the stock has had an impressive run on the bourse year to date. The company has gained a massive 68.6%, significantly outperforming the industry’s rally of 31.8%.
Adobe stock carries a Zacks Rank #2 (Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or #2 offer the best investment opportunities for investors. Thus, the company appears to be a convincing investment proposition at the moment.
ADBE has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive average earnings surprise of 7.8%.
The Zacks Consensus Estimate for fiscal 2017 earnings of $4.20 reflects year-over-year growth of 39.4%. Moreover, earnings are expected to register 30.5% growth in fiscal 2018. ADBE stock has long-term expected earnings per share growth rate of 17%.
Currently, there is strong demand for Adobe’s Creative Cloud software, which is adding to its subscriber base. Also, continued growth of Adobe Document Cloud subscriptions and Adobe Experience Cloud is aiding the company.
Adobe Experience Cloud was recently enhanced with new auto-focused analytics, personalization and advertising capacities. Using Adobe Experience Cloud and the Automotive Grade Linux project, companies can now introduce digital marketing in cars.
Also, companies can now personalize audio as well as in-car screen ads based on behavioral patterns (like interactions with infotainment systems and song selections) of people behind the wheels.
Adobe has been making great efforts toward establishing its presence in cloud-related software areas such as documents and marketing. Adobe Experience Manager, which enables brands to offer a personalized experience, is also witnessing robust growth.
We remain optimistic about Adobe’s market position, compelling product lines, continued innovation, strong cash flow generation and solid balance sheet. Also, the company’s expansion in growing markets such as artificial intelligence and machine-learning framework is a big positive.