Why Adobe Stock Crashed Today
Photoshop and Adobe Premiere maker Adobe ( $Adobe (ADBE.US)$ -9.34% ) reported first-quarter results on Tuesday evening, sparking a sharp correction. The stock fell as much as 10.4% on Wednesday morning, recovering slightly to a 9.5% decline as of 1:35 p.m. ET.
Beyond the geopolitical conflict, Adobe's business is firing on every cylinder. Tools for digital media production and document management systems are in high demand worldwide and across many different industries. Therefore, despite the war-based revenue reductions, Adobe's guidance points to double-digit sales growth in every category and a 13% year-over-year boost to the top line.
While the human toll from the war in Ukraine is terrible, the financial impact on Adobe's projected results is less than 0.5% of Adobe's annual sales.
Adobe's stock is trading near 52-week lows, nearly 40% below November's all-time highs. Shares are changing hands at the lowest price-to-sales (P/S) and price-to-earnings (P/E) multiples seen in several years, and the price drop looks like an overreaction.
While the human toll from the war in Ukraine is terrible, the financial impact on Adobe's projected results is less than 0.5% of Adobe's annual sales.
Adobe's stock is trading near 52-week lows, nearly 40% below November's all-time highs. Shares are changing hands at the lowest price-to-sales (P/S) and price-to-earnings (P/E) multiples seen in several years, and the price drop looks like an overreaction.
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