Adobe (ADBE) Stock Down 38% From Highs — Can Earnings Turn It Around?

TLDR

• Adobe CEO Shantanu Narayen announced plans to step down after nearly two decades leading the company
• Adobe beat Q1 estimates with EPS of $6.06 vs. $5.87 expected and revenue of $6.40B, up 12% year-over-year
• The board authorized a $25 billion share buyback — about 24.9% of outstanding stock
• Analyst consensus sits at “Hold” with an average price target of $338.15; Goldman Sachs rates it “Sell” with a $220 target
• Adobe stock opened at $259.21 on Monday, well below its 52-week high of $421.48

Adobe (ADBE) stock opened at $259.21 on Monday, sitting closer to its 52-week low of $224.13 than its high of $421.48 — and with earnings due June 11, investors are starting to pay attention again.

Adobe Inc., ADBE

The company beat Wall Street expectations in its last quarterly report. EPS came in at $6.06, topping the $5.87 consensus by $0.19. Revenue hit $6.40 billion, ahead of the $6.28 billion forecast, and up 12% from the same period a year ago.

Adobe has guided for FY 2026 EPS of $23.30 to $23.50, with Q2 EPS guidance of $5.80 to $5.85. Sell-side analysts are collectively forecasting $19.15 EPS for the full year.

Then there’s the buyback. In April, Adobe’s board signed off on a $25 billion share repurchase plan — one of the largest in the software sector right now. That works out to roughly 24.9% of outstanding stock. Companies typically do this when management thinks the stock is undervalued.

The market cap currently sits at $104.77 billion. The P/E is 15.10, and the P/E/G ratio is 1.01 — metrics that have caught the eye of hedge funds looking for undervalued AI plays.

CEO Stepping Down After Two Decades

CEO Shantanu Narayen told CNBC in April that he plans to step down. He’s been running Adobe for nearly 20 years. He said the timing made sense after getting the company’s AI strategy locked in.

Narayen pushed back on bearish takes around AI disruption, saying “the bears have it all wrong.” He pointed to Firefly models, enterprise tools, and Adobe Acrobat’s evolution into an AI workspace as evidence the company is adapting.

Adobe now serves 70 billion profiles, processes 35 trillion transactions per day, and reaches around 850 million monthly users across Acrobat, Express, and Creative Cloud.

Analyst Sentiment Is Mixed

Wall Street isn’t fully convinced yet. The consensus rating is “Hold” across 32 analysts. Goldman Sachs cut its price target to $220 and rates the stock “Sell.” KeyCorp dropped its target to $235 with an “Underweight” rating. BMO set a “Market Perform” at $285.

On the other side, nine analysts have a “Buy” rating, and one has a “Strong Buy.” The average target price is $338.15 — about 30% above where the stock trades today.

Institutional ownership stands at 81.79%. Savant Capital LLC trimmed its position sharply in Q4, cutting holdings by 85.6%. CFO Daniel Durn sold stock in April, and CAO Jillian Forusz sold in late April as well.

Adobe Analytics was named a “Champion” in Info-Tech Research Group’s 2026 Digital Analytics Data Quadrant, adding a positive data point ahead of earnings.

The 50-day moving average is $244.11. The 200-day sits at $284.08.

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