Adobe slides as weaker annual revenue guidance offsets Q4 results beat

Investing.com -- Adobe reported Wednesday fiscal fourth-quarter results that beat estimates, but softer revenue guidance weighed on the stock in extended trading. 

Adobe Systems Incorporated (NASDAQ:ADBE ) over 9% in premarket trading Thursday. 

For the three months ended Nov. 29, the California-based group reported adjusted earnings per share of $4.81 on revenue of $5.61 billion. Analysts polled by Investing.com anticipated earnings per share of $4.67 on revenue of $5.54B.

Net new digital media annualized recurring revenue was $578M, while digital experience segment revenue was $1.40B, representing 10% year-over-year growth.

Total (EPA:TTEF ) remaining performance obligations (RPOs) rose to $19.96 billion in the quarter, up 16% year-over-year, compared to the 15% growth in the prior quarter. 

For fiscal Q1, the company said it anticipates an adjusted EPS of $4.95 to $5.00, topping estimates of $4.94, while revenue was guided in a range of $5.63B to $5.68B, missing estimates of $5.72B. 

For 2025, the company said it anticipates an adjusted EPS of $20.20 to $20.50 on revenue of $23.30B to $23.55B compared with estimates for EPS of $20.53 on revenue of $23.80B.

This revenue outlook implies growth of around 9%, or about 10% in constant currency. Analysts at D.A. Davidson view this "as conservative given the various growth levers the company has to monetize the value provided to enterprises and proliferate freemium offerings."

The firm reiterated a Buy rating on ADBE but slashed the price target from $685 to $625.

Separately, Jefferies analysts said Adobe's print "was not the clearing event that investors had hoped for."

"Questions linger on how well ADBE can monetize the gen AI technology shift and the explosion in creative & marketing content. While mgmt's strategic outlook remains upbeat, investors still wait for the optimism to show up in the #'s," analysts led by Brent Thill explained.

Jefferies also reduced its price target on the stock from $700 to $650. 

Yasin Ebrahim contributed to this report. 

Source: Investing.com