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.
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