Adobe slips after reporting 'good' Q2, but analysts worry over guidance
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Adobe (NASDAQ:ADBE) shares slipped on Friday after the software company reported second-quarter results that topped expectations, but issued guidance that was below estimates, prompting analysts to worry about the "controversial" outlook.
Citi analyst Tyler Radke lowered his price target on Adobe (ADBE) shares to $380 from $425, but kept the firm's neutral rating.
Radke noted that the guidance "was controversial with [third-quarter] below the street and worse than last [quarter's] expectations for greater [quarter-over-quarter] growth, with commentary suggesting enterprise summer seasonality concerns, which we translate to incremental deal slippage/macro headwinds."
Adobe (ADBE) shares slipped slightly more than 3% to $352.78 in premarket trading on Friday.
In addition, Radke noted that the full-year guidance for Digital Media net new annual recurring revenue was maintained, which likely means there may be "more aggressive sequential [fourth-quarter] growth," but it's possible the company's guidance could "disappoint again" even as Adobe (ADBE) raises prices. 
Bank of America analyst Brad Sills lowered his price target to $450 from $560, but also noted that the company's margin outlook suggests that its scale is "largely absorbing" the impact from foreign exchange headwinds and Russia and strength in its key franchises is "encouraging."
"While [foreign exchange] impacted the [second-half] outlook, on a [constant currency] basis, the expectation for [Digital Media] and [Digital Experience] of 17% is unchanged," Sills wrote, adding that implied guidance for the fourth-quarter for Digital Media annual recurring revenue growth is "somewhat aggressive," but bullish comments added to it. 
Credit Suisse analyst Phil Winslow lowered his price target to $425 from $525, while also worrying about guidance.
"While [second-quarter] was positive, [third-quarter Digital Media annual recurring revenue] guidance miss supports our thesis of peaking net new [Digital Media annual recurring revenue], which we have believed would result in less forward upside to consensus estimates and drive decelerating revenue growth, which we anticipated will weigh on the stockâs performance," Winslow added.
Prior to reporting earnings on Thursday, Adobe's (ADBE) shares fell to a 52-week-low of $360.90 in the day's regular trading session, as it and other cloud-based software companies have been in rocky territory for days.