Market Overview

Analysts Will Have To Look Hard To Find Fault With Adobe's Q2 Results

Analysts Will Have To Look Hard To Find Fault With Adobe's Q2 Results

Shares of Adobe Systems Incorporated (NASDAQ: ADBE) gained more than 3 percent Wednesday after the company reported a top- and bottom-line beat in its second-quarter earnings report.

Deutsche Bank's Nandan Amladi felt the report was compelling enough to maintain a Buy rating on Adobe's stock with a price target boosted from $140 to $160 as there was "not much to quibble about."

Among the most encouraging aspects of the report was a the Creative and Marketing segments which helped sustain average revenue per user (ARPU) growth, Amladi said in a note. Management also cited an acceleration in the Stock business with new content providers and a "burgeoning" catalog which stands at 90 million assets.

Single-app downloads within the Video suite rose 49 percent from a year ago and a new Scan mobile app in the Acrobat franchise saw 750,000 downloads, the analyst added.

"This strategy of bringing new users into the franchise with an initial low friction/low price sale, then growing ARPU as they buy more, is tried and tested – and continues to work," the analyst wrote.

There were some concerning aspects in the report, Amladi noted. Specifically, organic growth ex-TubeMogul in the quarter was in the 18 to 20 percent range, which marks a deceleration from recent quarters. Also, expectations for a margin expansion in the bottom half of 2017 was "tamped down" given new hiring initiatives in Marketing.

Related Links:

Wunderlich Takes Adobe Price Target To Street-High $165 Following Q2 Earnings

20 Stocks Moving In Wednesday's Pre-Market Session

Latest Ratings for ADBE

Jun 2019UpgradesEqual-WeightOverweight
Jun 2019MaintainsBuy
Jun 2019MaintainsBuy

View More Analyst Ratings for ADBE
View the Latest Analyst Ratings

Posted-In: Adobe earnings Deutsche Bank Nandan Amladi Subscription RevenueAnalyst Color Earnings Price Target Analyst Ratings Best of Benzinga


Related Articles (ADBE)

View Comments and Join the Discussion!

Stock Market News for June 21, 2017

Why Fossil (FOSL) is a Touch-Me-Not Stock for Investors