Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- ADBE's revenue growth has slightly outpaced the industry average of 6.3%. Since the same quarter one year prior, revenues slightly increased by 9.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- Although ADBE's debt-to-equity ratio of 0.25 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 2.83, which clearly demonstrates the ability to cover short-term cash needs.
- Compared to its closing price of one year ago, ADBE's share price has jumped by 40.87%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ADBE should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- ADOBE SYSTEMS INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ADOBE SYSTEMS INC increased its bottom line by earning $1.65 versus $1.49 in the prior year. This year, the market expects an improvement in earnings ($2.43 versus $1.65).
Adobe Systems Incorporated operates as a diversified software company worldwide. It offers a line of software and services used by creative professionals, marketers, knowledge workers, application developers, enterprises, and consumers. The company has a P/E ratio of 21.6, above the average computer software & services industry P/E ratio of 20.9 and above the S&P 500 P/E ratio of 17.7. Adobe Systems has a market cap of $16.06 billion and is part of the
industry. Shares are up 14.1% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.