Adobe (ADBE) Ends FY15 Strong; Guidance Remains Conservative - FBR

FBR & Co. affirms Adobe (Nasdaq: ADBE) at Market Perform with a price target of $100 following the company's Q4 report and outlook issued Thursday night.

Analyst Samad Samana noted the following key points:

• New estimates. We are lowering our F1Q16 revenue estimate from $1.35B to $1.34B but maintaining our $0.63 pro forma EPS estimate. We are raising our FY16 revenue estimate from $5.71B to $5.72B but maintaining our $2.80 pro forma EPS estimate. We are raising our FY17 revenue and pro forma EPS estimates from $6.91B and $3.75 to $6.92B and $3.76, respectively.
• F1Q guidance conservative (as usual); FY16 guidance from analyst day reaffirmed. The company guided for F1Q16 revenue of $1.30B to $1.35B and EPS of $0.56 to $0.62, which at the midpoints came in below consensus of $1.33B and $0.61. The company reiterated its prior FY16 guidance for revenue of approximately $5.7B and EPS of $2.70 (consensus revenue: $5.74B, EPS: $2.81). Management now anticipates $1B of new ARR in FY16 vs. a $738M implied target previously (forecasted to exit FY16 with $3.9B of ARR).
• Creative Cloud sub growth; ARR beat consensus. The company added 833,000 net new subs, an increase from 684,000 in the prior quarter (consensus: 678,200 net new subs). Point product adoption (~506,500 new subs) was particularly strong (up more than 50% YOY) and contributed more than full subs (~326,500) to growth. However, demand for both was very healthy. The company ended the year with 6.2M subs, adding 2.7M subs in FY15. The strong sub growth helped Creative ARR beat expectations ($2.60B actual vs. consensus $2.56B). This, combined with solid demand for Document Cloud, led total digital media ARR to beat consensus as well.

For an analyst ratings summary and ratings history on Adobe click here. For more ratings news on Adobe click here.

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