Hot stock to watch: Adobe Inc (NASDAQ: ADBE)

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Adobe Inc (NASDAQ: ADBE) stock rose over 2.6% in the pre market session of 13th December, 2019 (as of  8:17 am GMT-5; Source: Google finance) after the company posted better than expected earnings for the fourth quarter of FY 19. Adobe has reported fiscal fourth-quarter earnings of $851.9 million compared to $678.2 million, a year earlier. For the fourth quarter, Digital Media revenue grew 22% to $2.08 billion. The addition of $539 million net new Digital Media ARR grew the total to $8.4 billion. Creative revenue grew 20% year-over-year and we increased Creative ARR by $445 million in Q4. Digital Experience revenue grew 24% to $859 million. In the Digital Experience segment, the company has achieved record quarterly revenue of $859 million, which represents 24% year-over-year growth in Q4. Subscription revenue for the quarter grew 31% to $726 million year-over-year. The company has generated the cash flow from operations of $1.38 billion ending cash and short-term investment position exiting Q4 was $4.18 billion.  The company during the quarter has increased RPO by more than $1 billion.

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ADBE in the fourth quarter of FY 19 has reported the adjusted earnings per share of $2.29, beating the analysts’ estimates for the adjusted earnings per share of $2.26, according to FactSet. The company had reported the adjusted revenue growth of 21.4 percent to $2.99 billion in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $2.97 billion.

Additionally, In Q4, the company had repurchased approximately 2.8 million shares at a cost of $771 million, and currently have $5.1 billion remaining of the $8 billion repurchase authority granted in May 2018 which goes through 2021.

Adobe Inc forecast first-quarter revenue to be below Wall Street expectations as the Photoshop-maker faces intense competition in a fast-growing cloud market.  The company expects revenue to be of about $3.04 billion, while analysts’ are expecting $3.09 billion. For Q1 2020, the company expects non-GAAP earnings per share to be of approximately $2.23.

For FY 20, the company expects total Adobe revenue to be of approximately $13.15 billion; Digital Media segment year-over-year revenue growth to be of approximately 19%; net new Digital Media ARR to be of approximately $1.55 billion; Digital Experience segment year-over-year revenue growth to be of approximately 16%; Digital Experience subscription revenue year-over-year growth to be of approximately 18%; Digital Experience subscription bookings year-over-year growth to be of greater than 20% and non-GAAP earnings per share to be of approximately $9.75.

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