Despite Today’s Retreat, Adobe Still Has Some Things Going For It Heading Into Tonight’s Report

(Photo Credit: Thomas Hawk)

After tonight’s closing bell, Adobe Systems (ADBE) will be one of the first companies to release results for the fourth quarter. Currently,  the Estimize consensus calls for EPS of $0.61, only one cent above the Wall Street consensus. Revenues of $1.316M are slightly above the Street’s expectation for $1.306M.

For the last four quarters, Adobe has successfully beaten analysts’ estimates on the bottom line and reported year-over-year growth in the double digits. Revenues have lagged slightly, but still managed to put up growth in the 9% to 21% range for the past three quarters. In Q3 the company reported record revenue due to success in their Marketing Cloud and Creative Cloud segments. As a result, Adobe issued guidance that Marketing Cloud bookings would increase 30% in fiscal 2016, driving total revenues to $5.7B and EPS to $2.70.

Just last week the company’s stock hit a 52-week high after announcing some exciting new product offerings in its cloud business. One area of focus is the Document Cloud business, with the recent introduction of new features as well as a partnership with Dropbox that will allow users of Adobe Acrobat to efficiently access files stored on Dropbox from Adobe apps.

In a note out this morning, FBR Capital analyst, Daniel Ives told investors that Adobe might be an appropriate acquisition target for Apple. He claims that such an acquisition would give Apple the push it needs to get into enterprise as the tech giant looks to ramp up its corporate presence through products such as the iPad Pro, and would help in selling its hardware. “Apple would also be at the center of the digital transformation within enterprises, as Adobe’s Document Cloud/ Marketing Cloud applications are helping enterprises grapple with the growth of digital marketing, proliferation of mobile devices in the enterprise, and IOT,” according to Ives.