Oppenheimer maintained an Outperform rating on shares of Adobe (NASDAQ: NASDAQ: ) with a firm price target of $625.00 on Friday. Adobe’s fiscal third quarter delivered strong results that beat estimates and posted the fastest growth in Digital Media Annual Recurring Revenue (ARR) in three years. In addition, the company posted a record operating margin for the fifth consecutive quarter.
However, the positive results were tempered by a conservative forecast for new Digital Media ARR, which is projected to be roughly half the five-year average for the same quarter for the upcoming fiscal fourth quarter. This cautious outlook is due in part to some pending fourth-quarter deals that closed in the third quarter and Cyber ​​Monday moving to the first quarter of fiscal 2025.
Guidance provided by Adobe indicates that any increase to the original net new ARR forecast for fiscal 2024 may be less significant than the prior year. This has fueled concerns over whether the recent surge in core bookings and the potential for further improvement in the fourth quarter will translate into a significant earnings acceleration in the next financial year.
The report suggests that these developments could have an impact on the company’s shares. Despite the mixed guidance, Oppenheimer’s position remains positive, as indicated by its maintained Outperform rating.
This article was developed with support from AI and was reviewed by an editor. See T&C for details.
