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Technology Stocks : Adobe (adbe) opinions -- Ignore unavailable to you. Want to Upgrade?

To: Mark Palmberg who wrote (2710)	9/16/1999 4:25:00 PM
From: S. Chiang	Respond to of 3111

From Briefing.com Adobe Systems (ADBE) 99 1/16 +3 3/4: Stock rebounding from yesterday's drubbing in anticipation of a strong earnings number due out after today's close... Consensus estimate is $0.73, a considerable improvement over year-ago gain of $0.37... However, based on the way the market has reacted to anything but blow-out earnings numbers, ADBE shareholders need to be asking themselves where the number must be in order for the stock to sustain its steady march to new highs... Over the past three quarters the company has beaten the consensus estimates by an average of 17%... Going back five quarters (all positive surprises) the average drops to 12.3%... Even using the lower percentage as a guide, ADBE might have to deliver a gain of as much as $0.82 in order to please the street... Most likely that's a little high, but we are hearing whisper numbers of $0.78, so it's very possible that the company could report a triple digit improvement in earnings only to see the stock drop over the next few sessions... Such is the perverse nature of the earnings game... But when you take into account that ADBE has risen by 111.9% year-to-date, and that it currently trades at 35x estimated FY99 earnings of $2.83, a little selling on the fact really wouldn't be that surprising... Longer-term, investors might want to consider using any earnings-related weakness to (re)enter the long-side as ADBE has a strong product pipeline and solid financials... Company's recently released Photoshop 5.5 and InDesign products have been well received... Internet growth also fueling demand, as company noted recently that over 60% of Photoshop users are now Web developers... Stock even cheap relative to its industry on a p/s basis... ADBE's p/s multiple of 7x is about one-third of the industry rate... Traders should also note that compnay has plenty of cash on hand to invest for growth or to buy back shares... Near-term support can be found in the 88-86 area... One final note - don't be surprised if company announces a stock split. -- RW