Topic: How To Invest

Stock Pickers Digest Hotline – Friday, March 16, 2018

Article Excerpt

ADOBE SYSTEMS INC., $225.55, symbol ADBE on Nasdaq, makes software that lets computer users create, edit and share documents in the popular PDF format. The company continues to benefit from strong demand for its subscription services, particularly the Creative Cloud package of photo-editing and desktop-publishing programs. In its fiscal 2018 first quarter, ended March 2, 2018, Adobe’s earnings jumped 23.0%, to $1.55 a share from $1.26 a year earlier. That beat the consensus estimate of $1.44. Revenue in the quarter rose 23.6%, to a record $2.08 billion from $1.68 billion. That also beat the consensus forecast of $2.05 billion. Recurring sources (subscriptions) now supply 86.3% of Adobe’s total revenue, up from 82.3% a year earlier. Adobe continues to spend a high 17% of its revenue on research. That investment helps it compete in a rapidly changing industry. However, the stock trades at a high 36.0 times the $6.26 a share the company will likely earn for fiscal 2018. That increases the chance of a sharp…

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