Technology

Adobe Systems (ADBE) is likely to post “solid” fiscal Q1 results with an upside to digital media annualized recurring revenue, RBC Capital Markets said in a note e-mailed on Monday. The software maker is scheduled to report fiscal Q1 results on Thursday. RBC projects non-GAAP earnings at $4.36 per share on revenue of about $5.13 billion. “While results should be positive, sentiment remains on the drivers of the results, specifically the incremental benefit from GenAI models and runway for future model rollouts particularly video, which has become a growing topic of investor interest following competitive product launches,” RBC analysts, including Matthew Swanson, said. The brokerage maintained its outperform rating on the stock, with a price target of $650.

Adobe Systems (ADBE) should meet or exceed fiscal first-quarter expectations amid digital media upside, though sentiment will likely hinge on the underlying drivers of the results, notably progress with generative artificial intelligence, according to RBC Capital Markets. In a Monday note reiterating an outperform rating and $650 price target on the stock, RBC analysts including Matthew Swanson and Matthew Hedberg said they expect solid results from the cloud-based software company on March 14. The “focus metric” for Adobe is net new annual recurring revenue, which the analysts said has the potential for outperformance in digital media. Management guided NNARR at $410 million, while the consensus is $414.5 million, according to the brokerage’s report. From a seasonality perspective, the guidance puts first-quarter ARR in line with the three-year average. “We’d note the average beat over the past four quarters has been 10%, which would point to $455 million,” Swanson and Hedberg