Creative software developer Adobe (ADBE)is set to release its first quarter Fiscal 2025 financials on March 12. ADBE stock has lost over 19% in the past year, primarily due to uncertainty around monetizing its AI products, rising competition in the creative software market, and tough economic conditions hurting its Digital Media business. Wall Street analysts expect the company to report earnings of $4.97 per share for Q1, up 11% year-over-year.
Meanwhile, analysts expect revenues to increase 9.3% from the year-ago figure to $5.66 billion, according to TipRanks’ data. Notably, Adobe has exceeded EPS estimates for the past nine consecutive quarters.
Analysts’ Opinions Ahead of Adobe’s Q1 Earnings
Ahead of Adobe’s Q1 earnings, TD Cowen analyst J. Derrick Wood kept a Hold rating on the stock with a price target of $550 per share. Wood noted that though the recent survey shows better partner execution and growth in Adobe’s small business segment, the outlook for 2025 remains weak.
For Q1 FY25, the analyst expects Adobe to meet or slightly beat first-quarter targets. However, they believe future guidance will remain cautious due to economic uncertainty.
Meanwhile, RBC Capital analyst Matthew Swanson lowered Adobe’s price target to $550 from $590, while keeping an Outperform rating. Swanson expects the company to report strong first-quarter results on March 12, with the Adobe Summit taking place the following week. He expects Adobe to share more details on AI-related revenue and the growth of Adobe Express, a tool for creating graphics, videos, and web pages, to support Creative Cloud.
Options Traders Anticipate a Large Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting a 8.41% move in either direction.
Is Adobe a Good Stock to Buy?
Turning to Wall Street, Adobe has a Moderate Buy consensus rating based on 19 Buys, eight Holds and one Sell assigned in the last three months. At $572.17, the average ADBE price target implies 27.32% upside potential.
