Adobe shares suffer steepest drop in over two years on disappointing revenue guidance
Adobe shares tumbled after the software vendor issued revenue guidance that fell short of analysts' estimates.
Adobe shares fell 14% on Thursday, their steepest drop since September 2022, after the software vendor issued disappointing revenue guidance.
Sales in the fiscal first quarter will be between $5.63 billion and $5.68 billion, Adobe said in its fourth-quarter earnings report late Wednesday. Analysts on average were expecting revenue of $5.73 billion, according to LSEG.
Analysts at TD Cowen downgraded the stock to hold from buy, while Wells Fargo kept its buy rating following what it called a "frustrating '24" for the company. The stock is now down 20% for the year, badly trailing the Nasdaq, which is up 33% and crossed the 20,000 mark for the first time on Wednesday.
While Adobe's forecast trailed estimates, the company's fourth-quarter results exceeded expectations.
Adjusted earnings per share came in at $4.81, topping the average analyst estimate of $4.66, according to LSEG. Revenue in the fourth quarter increased 11% to $5.61 billion, beating the average estimate of $5.54 billion.