Trading Adobe After Fiscal Q1 2024 Performance

Adobe is a multinational software company whose products include Adobe Acrobat, Experience Cloud, Photoshop, Lightroom, Illustrator and its new AI Sensei, among others.   

The tech company just announced its fiscal first-quarter 2024 earnings report. Learn more about Adobe’s performance and what analysts are forecasting for the stock below.

• The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose, as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing. 

Adobe Fiscal Q1 2024 Performance

Here are some of the key highlights from the latest fiscal first-quarter 2024 earnings report from Adobe: 

• Earnings per share of $4.48 vs $4.38 expected 
• Revenue of $5.18 billion vs $5.14 billion expected 
• Revenue up 11% year over year for the quarter 
• Net income was down to $620 million vs $1.36 billion same quarter last year 
• Announced $25 billion share repurchase program 
• $1 billion termination fee to abandon $20 billion acquisition of Figma 
• Launching an early version of an artificial intelligence assistant for its Reader and Acrobat apps 

Adobe beat analyst expectations on both earnings and revenue. Breaking down the numbers, its Digital Media segment revenue grew 12% year over year to $3.82 billion. Its Creative revenue grew to $3.07 billion while its Document Cloud revenue was up 18% year over year.  

Investors will be keen to see if its new artificial intelligence assistant can help to increase revenue and maintain its subscriber numbers. President of Adobe's digital media business stated in the earnings call that its product enhancements in the Adobe Express app, new Acrobat assistant and Firefly Services AI product "should lead to an acceleration in digital media revenue." 

But while the earnings report and call were largely positive, the stock sank 12%. Adobe also announced a lower net income compared to the same time last year and a $1 billion termination fee from its proposed $20 billion acquisition of Figma. The fall in its stock price was largely attributed to a weaker fiscal second-quarter guidance and that the management team avoided providing a full-year forecast.  

The weaker guidance came from the fact its management team said the AI-fuelled boom in the stock market is likely to fade bringing valuations and expectations in line with historical standards. It is one reason that analyst ratings for Adobe's stock price are mixed, as shown below.

Adobe Stock Forecast - What do the Analysts Say?

According to analysts polled by TipRanks for an Adobe stock forecast in the past 3 months, there are currently 21 buy, 6 hold and 2 sell ratings on the stock. The highest price level for a Adobe stock forecast is $700.00 with the lowest price target at $465.00. 

The average price target for a Adobe stock forecast is $623.37.

An Example Trading Idea for the Adobe Stock Price

An example trading idea for the Adobe share price could be as follows:  

• Buy the stock on a break above $580.00 to allow for volatility. 
• Target just below the highest analyst price target of $700.00. 
• Keep your risk small at a maximum of 5% of your total account.   
• Time Line = 1 – 6 months  
• If you buy 10 Adobe shares:  
  • If target is reached = $1,200.00 potential profit [($700.00 - $580.00) * 10 shares].

Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering the 12% drop in its share price after the earnings announcement.

Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.

With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in Adobe stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.

There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall! 

How to Buy Adobe Stock in 4 Steps  

With Admirals, you can buy shares with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks. 

1. Open an account with Admirals to access the dashboard.   
2. Click on Trade on one of your live or demo accounts to open the web platform.   
3. Search for your stock in the search window at the top right to view the live price chart. 
4. Click Create New Order from the bottom of the screen to open the trading ticket. 

Click on the banner below to trade Adobe stock today ▼▼▼ 

Do You See the Adobe Stock Price Moving Differently?   

Remember that all analytics and trading ideas are based on the personal view and experience of the author.

If you believe there is a higher chance Adobe share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.

The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.

This means you can trade long and short to potentially profit from rising and falling stock prices.

INFORMATION ABOUT ANALYTICAL MATERIALS:   

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