Adobe (NASDAQ:ADBE) is scheduled to release its second-quarter earnings results this Thursday. The tech company last posted its earnings on March 23 where sales of $3.9 billion for the period ending March 5 grew 26% year over year. Its diluted earnings per share of $2.61 was even more impressive, increasing by 33% from the prior-year period.
According to data from Zack's, Adobe has beaten earnings expectations for nine periods in a row. And only once in the past 10 reports have its sales come in below what analysts were expecting. The company has generally done well on earnings day and there's little to expect that things will be any different this week.
Adobe's subscription-based model has proven to be popular with consumers, giving them a flexible and affordable way to use the company's top-of-the-line products. The strong brand loyalty that it enjoys makes it a safe investment to hold on to hold in your portfolio for the long term.
The only question is whether Adobe's stock has gotten too expensive. Today, the stock trades at close to 50 times its earnings, even on a forward basis. And that's with the stock rising a modest 8% in value since the start of the year (the S&P 500 is up over 13%).
Overall, Adobe is a quality buy for growth investors looking for a top stock to own. But if you're betting on earnings lifting its shares a whole lot higher, you may be disappointed as even with strong results in 2021, that hasn't been enough for it to outperform the markets.
