The global diversified software company (NYSE: ADBE) will release its financial results for the second quarter of Fiscal 2022 tomorrow, June 16, after the market close. The company offers digital marketing and media solutions.
With a market capitalization of $175.21 billion and strong sector performance, Adobe has emerged triumphant in the software market. A strong focus on the Digital Media business and Adobe Experience Cloud are expected to aid Adobe’s results.
In the last quarter, Adobe posted better-than-expected results driven by strong growth in revenues, which represented a 17% year-over-year rise in Digital Media segment revenues, a 20% jump in revenues in the Digital Experience segment, and a 22% surge in Digital Experience subscription revenues.
Therefore, prior to the fiscal Q2 2022 earnings release, with the help of TipRanks’ Website Traffic Tool, we can see how the company might have performed in Q2. This new tool measures and analyzes a company’s website visits over a particular time period.
Increased visits to the website indicate more demand for the company’s products and services.
Website Visit Stats Reflect an Upward Trend
Using the website traffic tool, an uptrend was identified. In Q2 2022, total visits to adobe.com showed an increasing trend, representing a 6.42% jump from the prior-year quarter and an 8.24% rise on a sequential basis.
This reflects the rising popularity of the company’s products focused on advertising, publishing, and visual media. Solid adoption of Adobe’s various platforms such as Creative Cloud Express, Acrobat, and Adobe Sign, along with the wide acceptance of Adobe Experience Manager, is likely to have boosted revenues in the to-be-reported quarter.
For the second quarter of Fiscal 2022, the company expects adjusted earnings of $3.30 per share on net revenue of $4.34 billion. Moreover, Adobe anticipates double-digit revenue growth across all its units. Meanwhile, the consensus estimate is pegged at earnings of $3.31 per share on total revenues of $4.35 billion.
However, amid ongoing issues between Russia and Ukraine, Adobe ceased all new sales of Adobe products and services in Russia and Belarus. Consequently, the brunt of the expected ARR reduction of $87 million and revenue impact of $75 million in Fiscal 2022 is likely to be reflected in the second-quarter results as well.
Wall Street’s Take
Despite the recent sell-off in the tech sector, Wall Street analysts seem bullish on the ADBE stock ahead of its Q2 print.
Recently, Mizuho Securities analyst Gregg Moskowitz reiterated a Buy rating on Adobe but reduced the price target to $530 (42.93% upside potential) from $600.
Moskowitz commented, “Despite a higher level of macro uncertainty, our ADBE checks surprisingly were somewhat better this quarter, and we are expecting the company to report solid upside to our/Street estimates.”
“More broadly, we believe ADBE is very well positioned to benefit from digital transformation with its highly comprehensive end-to-end offering that differentiates it from competitors and should enable it to drive more holistic sales across its clouds,” the analyst added.
The five-star analyst considers the company’s risk/reward favorable at the current level.
Overall, the stock has a Strong Buy consensus rating based on 21 Buys and five Holds. The average Adobe price target of $549.04 implies 48.06% upside potential. Meanwhile, shares have lost more than 32% over the past year.
On top of this, Adobe scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
Concluding Remarks
The increase in website traffic indicates the wide acceptance and rising popularity of Adobe’s creative solutions, including industry-leading products such as Illustrator and Photoshop. This, in turn, is expected to attract more users, aiding revenue growth in the upcoming quarter.
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