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10% Sell-off Sparked as Adobe Q4 Earnings Misses Estimates

Ollie Martin - AskTraders News writer
Ollie Martin trader
Updated 16 Dec 2021

Adobe (NASDAQ: ADBE) stock fell sharply in mid-market trading on Thursday, after posting Q3 earnings that didn’t match up to the Wall Street consensus. Despite posting record Q4 earnings, the stock tanked around 10% as investors still reacted in the disappointment of the software company.

Despite posting a record fourth quarter, it was the 2020 forecast that threw bulls of the ball…

Adobe projected revenue of roughly $17.9B, with an adjusted profit of $13.70 a share for fiscal 2022. However, Wall Street analysts expect revenue of $18.2B and earnings of $14.26.

The company expects next year’s Q1 EPS to come in around $3.35 with a revenue of $4.23B – with analysts expecting profits of $3.39 a share on sales of $4.33B. Following the dissatisfying results, sellers took hold of the market, pushing price down towards 6-month lows. 

However, this could act as nothing more than a retracement for Adobe stock. Still posting a record annual revenue of $15.79B for 2021 at a growth rate of 23%, Adobe is still on track for long-term success – with an established foundation in a rapidly growing sector. Adobe estimates its addressable market could expand to around $205B by 2024 – a sector that investors won’t want to glaze over.

Ollie Martin - AskTraders News writer
Oliver is a financial writer and analyst specialising in the US stock market, with years of personal experience in understanding micro/macroeconomic structures, market trends and fundamental analysis.