Adobe heads into Q3 earnings with shares under pressure
Adobe will report third-quarter results Thursday after market close, with analysts expecting revenue of $6.69 billion and EPS of $6.09. Investors will watch for AI-driven demand commentary and growth in remaining performance obligations.
Adobe Inc. is due to report third-quarter financial results Thursday after market close, with investors looking for a catalyst for a rebound in the shares. 99 billion a year earlier, according to data Pro. 31 in the same quarter last year.
The company has topped analyst revenue estimates in six straight quarters and in nine of the last 10 quarters overall. It has also beaten analyst earnings-per-share estimates in six straight quarters and in nine of the last 10 quarters overall. 6%. Adobe stock is down 23% year-to-date and 70% from its March 2024 three-year high, according to Woods.
Woods also said Adobe has lost its chief executive officer and chief financial officer in the last six months and recently named a chief executive replacement. Woods said that when Adobe reports, it needs more than an earnings beat and must change the narrative, as Wall Street continues to question whether AI is an opportunity or an existential threat to its future growth. Investors, he said, need a reason to believe again. On the technicals, Woods said the upside appears far greater and that risk/reward definitely skews to taking a shot at that upside potential.
Recent analyst ratings on Adobe include Stifel, which maintained a Hold rating and raised its price target from 200 to 225; Barclays, which maintained an Equal-Weight rating and raised its price target from 250 to 295; RBC Capital, which maintained an Outperform rating and raised its price target from 285 to 315; and Citigroup, which maintained a Neutral rating and raised its price target from 228 to 301. Adobe recently named Anil Chakravarthy as its new CEO effective Dec. 1. Chakravarthy currently leads Adobe’s Customer Experience business.
The new CEO is described as having experience that could help lead Adobe in the AI-driven era. Chakravarthy has been with Adobe since 2020. Before joining Adobe, he was CEO of Informatica for four years. His earlier roles also included Symantec, VeriSign and McKinsey & Co.
7% on news of Chakravarthy’s hiring as CEO. Adobe’s second-quarter results showed revenue up 13% year over year and total annualized recurring revenue tripling year over year. 27 billion in remaining performance obligations at the end of the second quarter. Investors and analysts will be watching to see whether that figure grows in the new quarter.
They will also look for commentary on "AI-driven demand," after the company cited strong AI-driven demand in the second quarter and raised full-year guidance. 86. 3% year-to-date in 2026.