Tech company Adobe (NASDAQ:ADBE) reports its first-quarter earnings numbers tomorrow, after the markets close. It will also have a conference call afterwards at 2pm PT to discuss the results.
The company last reported earnings in December, when it posted record Q4 numbers with sales of $4.1 billion for the period which were up 20% year over year. Its operating profit of $1.5 billion also rose by 24% from the prior-year period. In Q1, the company projects its revenue will rise to $4.23 billion.
Adobe typically beats expectations on earnings. The question for investors may be whether it's a strong enough beat, and what its guidance looks like. Year to date, the stock is down 21% as it and other growth stocks have struggled in the early part of 2022. And one problem with Adobe's stock is that it isn't cheap; even with the decline, its shares are trading at more than 44 times the company's profits. The last two times the stock reported earnings, it would go on to decline shortly afterwards.
Unless Adobe knocks it out of the park with strong guidance, it wouldn't be surprising for the stock to again fall after the release of its quarterly results. While Adobe's business is sound and it's generating tons of money, given the bearishness in the markets right now, it may be a good idea to wait out more of a decline before buying the stock. Adobe still isn't terribly close to its 52-week low of $407.94, and that could change if its earnings result proves to be underwhelming.
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