Ahead of Adobe Earnings, Here's What Barchart Data Says Comes Next for ADBE Stock

Adobe (ADBE) stock has inched lower ahead of the software giant’s fiscal Q3 earnings scheduled to be released after the market closes on Sept. 10. Consensus is for ADBE to record $4.86 a share of earnings (EPS) for its third quarter, which would represent about a 13.29% growth on a year-over-year basis. 

Despite the recent decline, Adobe shares remain up more than 20% versus their low in late June. 

Options Data Signals a Post-Earnings Selloff

According to Barchart, options traders are convinced the recent selloff will accelerate after Adobe reports earnings later today. 

The put-to-call ratio on contracts expiring Sept. 11 sits at 1.65x at the time of writing, signaling a very strong bearish skew. And the lower price on those contracts is set at about $237, indicating potential for a post-release decline of nearly 7% through the end of this week. 

Even from a technical perspective, ADBE shares have recently crashed below their 20-day moving average, with an RSI in the early 40s suggesting intense selling pressure that may drive them lower in the weeks ahead. 

ADBE Shares Are Attractively Priced

Despite the bearish derivatives market sentiment, investors should note that in terms of valuation, Adobe shares are actually more attractive than both Figma (FIG) and Salesforce (CRM). 

As of writing, they’re trading at a price-to-sales (P/S) multiple of about 4.3x only versus nearly 5x for CRM and a much higher 9.8x for FIG. 

It's also worth mentioning that insiders have loaded up on about 10,000 company shares in the trailing three months, handily beating the 416 that have been sold during the same period. 

The optics of this insider activity are also bullish for Adobe, especially since it announced a $25 billion stock buyback plan earlier this year as well. 

How Wall Street Recommends Playing Adobe Stock

Wall Street analysts aren’t particularly bullish on ADBE stock heading into the multinational’s Q3 earnings, though. 

According to Barchart, the consensus rating on Adobe sits at “Hold” currently, with a mean price target of about $267 indicating potential upside of only 5% from here over the next 12 months. 

On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.