With earnings out of the way, is Adobe ready to climb again?
Software giant Adobe (Nasdaq: ADBE) reported earnings on September 17 and the company beat on the top and bottom line. The company was expected to report EPS of $1.42 and the actual figure came in at $1.61. The reported revenue beat by $10 million at $2.83 billion. Despite the beat, the stock dipped slightly after the report as the company’s guidance was a little disappointing. Personally I think that was because expectations were pretty high for Adobe heading in to the report.
Now that the earnings report is out of the way, is the stock ready to resume its upward trend? If we look at the weekly chart we can see how the stock trended higher from late 2016 through the third quarter of 2018. The stock pulled back in the fourth quarter before starting a new uptrend from December through mid-July. In late July the stock started pulling back from its overbought levels.
Now we see that the weekly stochastic readings are reaching oversold territory and are as low as they have been in the last three and a half years. The 10-week RSI dipped below the 50 level and that is something that hasn’t happened all that often in recent years.
Something else that stands out on the chart is the fact that the stock has only been below its 52-week moving average on a few occasions. The stock is approaching that trend line at this time. With the lower rail of the trend channel and the 52-week moving average in place as possible support, the stock may be ready to move higher again.
In addition to the setup on the weekly chart, the Moving Average Convergence Divergence (MACD) Histogram just turned positive. According to Tickeron’s Technical Analysis Overview, in 32 of 47 cases where Adobe's MACD histogram became positive, the price rose further within the following month. The odds of a continued uptrend are 68%.
Turning our attention to the fundamentals, Adobe has performed really well over the last few years. The company has seen earnings grow by an average of 43% per year over the last three years while sales have grown by 24% per year. In the most recent report, earnings were up 18% and sales were up 24%. Analysts expect earnings to grow by 16% for 2019 as a whole while sales are expected to increase by 23.5%.
Adobe’s management efficiency measurements are well above average with a return on equity of 37.8% and a profit margin of 39.6%. When we combine these figures with the sales growth, we get the SMR rating from Tickeron. Adobe’s SMR rating is 12 and that indicates very strong sales and a profitable business model.
We also see that the Tickeron Profit vs. Risk Rating for Adobe is 13, indicating low risk on high returns. The average Profit vs. Risk Rating for the industry is 79, placing this stock much better than average.
Looking at the sentiment toward Adobe, 19 out of 30 analysts have the stock rated as a “buy” while 11 have it rated as a “hold”. This puts the buy percentage at 63.3% and that is slightly below average which is hard to believe considering how well Adobe has performed as a company and how well the stock has performed in recent years.
The short interest ratio is at 2.63 currently and that is slightly below the average stock. However, for Adobe this is one of the highest readings in the past year and the ratio has been trending higher over the last few months. The three highest readings in the past year have all come in the last two months. This suggests that the bearish sentiment toward the stock is increasing and that is a good thing from a contrarian perspective.
ADBE in upward trend: price expected to rise as it breaks its lower Bollinger Band on June 17, 2025
ADBE may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 40 cases where ADBE's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where ADBE's RSI Indicator exited the oversold zone, of 26 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator is in the oversold zone. Keep an eye out for a move up in the foreseeable future.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where ADBE advanced for three days, in of 332 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on July 09, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on ADBE as a result. In of 80 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
ADBE moved below its 50-day moving average on June 17, 2025 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for ADBE crossed bearishly below the 50-day moving average on June 26, 2025. This indicates that the trend has shifted lower and could be considered a sell signal. In of 18 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ADBE declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for ADBE entered a downward trend on July 09, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. ADBE’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (14.556) is normal, around the industry mean (31.479). P/E Ratio (47.957) is within average values for comparable stocks, (164.144). Projected Growth (PEG Ratio) (1.863) is also within normal values, averaging (2.732). Dividend Yield (0.000) settles around the average of (0.030) among similar stocks. P/S Ratio (11.534) is also within normal values, averaging (62.041).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. ADBE’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 88, placing this stock worse than average.
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General Information
a developer of software solutions for web and print publishing
Industry PackagedSoftware
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