Adobe slips following weak guidance, but SaaS stocks rebound to end the week
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Adobe (NASDAQ:ADBE) shares slipped on Friday after the cloud-based software company issued guidance that fell short of expectations, but several other software-as-a-service stocks attempted to end the week on a positive note.
Adobe (ADBE) lost slightly more than 1% to $361.34 after it said third-quarter revenue would be $4.34B and adjusted earnings would be $3.33 per share, compared to estimates of $4.51B in sales and adjusted earnings of $3.40 per share.
For the full-year, Adobe (ADBE) said it expects revenue to be $17.65B, down from a prior outlook of $17.9B. Adjusted earnings are forecast to be $13.50 per share, down from a prior outlook of $13.70 per share.
Analysts were expecting the Adobe (ADBE), which reported strong second-quarter results on Thursday, to generate $17.85B in full-year revenue and adjusted earnings of $13.67 per share.
Nonetheless, several other software stocks rose on Friday, attempting to rebound from a Fed-induced sell-off earlier in the week.
Leading the way were shares of ServiceNow (NOW), which rose more than 3.5% in mid-day trading. Salesforce (CRM) and Intuit (INTU) both gained nearly 3%, while Autodesk (ADSK), IBM (IBM) and Microsoft (MSFT) saw more modest gains.
Year-to-date ServiceNow (NOW), Salesforce (CRM), Intuit (INTU) and Microsoft (MSFT) shares have lost between 25% and 40%, due in large part to worries over rising inflation, slower enterprise spending and a potential economic recession.
Following Adobe's (ADBE) results on Thursday, several Wall Street analysts worried about the lowered guidance, including one who called the outlook "controversial."