What To Watch For In Adobe’s Q1

by Trefis Team
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Adobe (NASDAQ:ADBE) will report its fiscal Q1 earnings on Thursday, March 14. Adobe has been delivering strong results of late on the back of the company’s focus on user experience and associated analytics. The company continues to leverage the need for creativity and trends of digital transformation through technology, content management, analytics and personalization. While we expect Q1 to be largely positive, traction in the company’s commerce cloud and macro trends are likely to be key factors to be watched.

We currently have a price estimate of $256 per share for Adobe, which is around the current market price. Our interactive dashboard on Adobe’s Price Estimate outlines our forecasts and estimates for the company. You can modify any of the key drivers to visualize the impact of changes on its valuation, and see all of our technology company data here.

Adobe reported a strong Q4 and fiscal 2018 on the back of broad-based growth. The company’s initiatives around a ‘unified customer profile’ are likely to help Adobe sustain customer spending with it. Furthermore, we note that the company’s AI and ML platform Sensei has been becoming a big driver in customer conversations. Adobe’s management had accordingly laid out Q1 guidance of $2.54 billion for revenue and non-GAAP EPS of about $1.60.

In terms of specific things to watch, going into Q1, we will be looking for commentary around:

  • Traction in the company’s commerce cloud, especially the Magento Commerce solution for large enterprises.
  • Updates on Adobe’s partnership with Microsoft and SAP and color on incremental opportunities arising from the ODI alliance.
  • Selling of complete solutions on the back of Adobe’s push towards capturing the entire cycle of “discover, try, buy, use and renew.”
  • Management perspective regarding spending resilience on digital transformation projects in light of macro headwinds.
  • Concerns around privacy in light of possible trade understanding with China.

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