Adobe (NASDAQ:ADBE) reported its fourth-quarter FY2024 results after market hours on Wednesday, and its FY2025 guidance fell less than 9% in after-hours trading. Although the stock price has plummeted, it provides us with a rare buying opportunity.
According to the financial report data, the company’s Q4 revenue was $5.61 billion, a year-on-year increase of 11%, better than the market expectation of $5.54 billion; Earnings per share, excluding certain items, were $4.81, also better than the consensus of $4.67.
Adobe’s annual digital media recurring revenue (ARR) for the quarter was $17.3 billion, slightly above analysts’ average estimates.
In the fourth quarter, revenue in the digital media segment, which includes Adobe’s flagship creative and document processing software, increased 12% year-over-year to $4.15 billion. Segment revenue, which includes marketing and analytics software, increased 10% year-over-year to $1.4 billion.
However, Adobe issued disappointing revenue guidance for fiscal year 2025, which it expects revenue to reach about $23.4 billion in the fiscal year ending November 2025, with earnings per share excluding certain items in the range of $20.20 to $20.50. That compares to an average analyst estimate of $23.8 billion on revenue and adjusted earnings per share of $20.52.
David Wadhwani, head of Adobe’s creative business, said on an earnings call that the company will soon launch a “new product for Firefly that is more expensive,” which includes a video model.
Dan Durn, Adobe’s chief financial officer, said that the “strategy of continuing to roll out new tiered subscription services and add-on services” is in the scope of the guidance.
Adobe (NASDAQ:ADBE) Daily candlestick chart – 12.12.2024
I bought Bo’s earnings report before the market, I know that the position is not ideal, Bobo’s financial report, if the financial report is less than expected, you can achieve profitability through the opportunity to buy low.
At one point in after-hours trading, it rose more than 3%, and I thought it was stable, but it quickly turned down due to the performance guidance falling short of expectations, and the position has been trapped. Under the condition that the NASDAQ index does not dive sharply, I predict that the stock price will fall to $480 at the limit, and the future stock price will fluctuate in the range of $480-$600, with support at $480 and pressure at $600. In the past six months, the stock has significantly underperformed the NASDAQ 100 index and also underperformed the industry software index. Based on FCF valuation, EBITDA valuation level is much lower than that of the same industry, the competitive advantage is obvious, the key to stock price performance is whether it is re-focused by the market, the stock price successfully stands at $600 is only a matter of time, it can fall more and more, but the total position can not exceed 15%.