Shares of Adobe (ADBE) - Get Adobe Inc. Report rose in after-hours trading Monday after the San Jose, Calif. software company offered an earnings forecast for fiscal 2020 that exceeded analysts' expectations.
At a financial analyst meeting, Adobe estimated revenue will total $13.15 billion in the year beginning Dec. 1, compared to analysts' forecast of $13.14 billion, according to Barron's. The company also projected adjusted earnings per share of $9.75 for fiscal 2020, compared to analysts' prediction of $9.70.
Adobe put net new annual recurring revenue for digital media, which tracks new demand for the company's creative and document software, at $1.55 billion for fiscal 2020. That tops analysts' forecast of $1.53 billion, according to Bloomberg. Investors care about that number because of Adobe's general slowdown in revenue growth, the news service reported.
"Our strategy to unleash creativity, accelerate document productivity and power digital businesses is driving our growth and represents a $128 billion opportunity in 2022," Shantanu Narayen, Adobe CEO, said in a news release announcing the estimates.
Adobe shares stood at $290.99, up 4.86% in after-hours trading. Through Friday, the stock returned an annualized 15.80% for the last one year, 37.74% for three years, 31.32% for five years and 23.41% for 10 years, according to Morningstar.
Morningstar analyst Dan Romanoff puts fair value for the stock at $296. "The company is introducing and leveraging features across its various cloud offerings (like Sensei artificial intelligence) to drive a more cohesive experience, win new clients, upsell users to higher price point solutions, and cross-sell digital media offerings," he wrote in June.
Adobe is scheduled to report fourth-quarter fiscal 2019 earnings Dec. 12.
This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.