Adobe shares rallied 1.4% after beating Q3 earnings estimates, though a conservative Q4 revenue guidance and mixed analyst sentiment continue to weigh on the stock's long-term outlook.
Adobe beat Q3 earnings but guided Q4 revenue below estimates, leading to mixed analyst actions; Cramer suggests a potential short squeeze.
Adobe Inc. shares gained 1.4% on Friday following a Q3 earnings beat, with revenue reaching $6.76 billion and EPS hitting $6.13. Despite the positive quarter, the company issued a Q4 revenue forecast of $6.80 billion to $6.85 billion, falling short of analyst expectations and prompting price target cuts from firms like JPMorgan.
Adobe shares rose 1.4% as investors focused on the company's Q3 earnings beat and significant growth in AI-related annual recurring revenue, which grew 150% annually.
Analysts are concerned about the company's conservative Q4 revenue guidance, a 36-37% dip in net new ARR, and muted growth in remaining performance obligations.