Adobe FQ1 earnings preview: Fundamentals appear strong but all eyes on Figma
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Adobe (NASDAQ:ADBE) is trading around +3% on Tuesday, a day ahead of its FQ1 earnings results, which is scheduled to release after market close.
The consensus EPS Estimate is $3.68 (+9.2% Y/Y) and the consensus Revenue Estimate is $4.62B (+8.5% Y/Y).
Over the last 2 years, ADBE has beaten EPS estimates 100% of the time and has beaten revenue estimates 88% of the time.
Over the last 3 months, EPS estimates have seen 15 upward revisions and 5 downward. Revenue estimates have seen 9 upward revisions and 10 downward.
Shares of the California-based software company have fallen about 19% in the past year despite posting a slight gain year to date.

The company announced its intention to acquire software company Figma in late 2022 in a blockbuster $20B deal. The EU has reportedly taken an interest in the deal, as have US regulators. According to Bloomberg, a suit is ready to be filed soon.
Nonetheless, the consensus sell-side rating on the name remains a Buy. According to Bank of America, the company could be a key beneficiary from advancements in AI technology.
In a note ahead of Adobe's (ADBE) earnings, Jefferies highlighted headwinds ahead including smaller deal sizes and more intense competition in the mid-market, although it also noted some rebound in Europe as large companies that had delayed major digital transformation projects resumed buying.
Wells Fargo views Adobe's FQ1 setup to be 'relatively straightforward' with mostly steady/solid demand. Investor attention will shift towards the Adobe Summit and management announcements, with the Figma acquisition expected to limit share movement either ways.
Morgan Stanley too attributed the regulatory uncertainty around the Figma deal to Adobe (ADBE) underperforming the sector.
SA contributor Kennan Mell highlighted updates on Figma as one of three catalysts to watch for in FQ1 and 2023. The other two include macro issues and management commentary on Adobe's work with AI.