Adobe shares plunge 13% on disappointing 2025 revenue guidance

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shares plunge 13% on disappointing 2025 revenue guidance

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CEO Shantanu Narayen speaks during an interview with CNBC on the floor of the New York Stock Exchange on Feb. 20, 2024.

Brendan Mcdermid | Reuters

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shares fell 13% on Thursday and headed for their steepest drop since March after the software vendor issued disappointing revenue guidance.

Sales in the fiscal first quarter will be between $5.63 billion and $5.68 billion,

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said in its fourth-quarter

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late Wednesday. Analysts on average were expecting revenue of $5.73 billion, according to LSEG.

Analysts at TD Cowen downgraded the stock to hold from buy, while Wells Fargo kept its buy rating following what it called a “frustrating ’24” for the company. The stock is now down 20% for the year, badly trailing the Nasdaq, which is up 33% and crossed the 20,000 mark for the first time on Wednesday.

While

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’s forecast trailed estimates, the company’s fourth-quarter results exceeded expectations.

Adjusted earnings per share came in at $4.81, topping the average analyst estimate of $4.66, according to LSEG. Revenue in the fourth quarter increased 11% to $5.61 billion, beating the average estimate of $5.54 billion.

Monetizing generative artificial intelligence, especially in standalone offerings like Firefly image generation or additional offerings across the Creative Cloud, has been central to

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’s growth strategy.

Analysts at Deutsche Bank maintained their buy rating, but lowered their target price from $650 to $600.

“These results and guidance require a bit of faith in the full year next year,” the analysts wrote. Still, they said, “We see tangible evidence that

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is one of few application software companies in our coverage successfully monetizing generative AI today.”

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has the ability to improve its performance and market reach

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#shares #plunge #disappointing #revenue #guidance

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