Adobe Inc. (NASDAQ:ADBE) shares fell sharply in Friday’s premarket trading after the company unexpectedly announced that longtime CEO Shantanu Narayen will step down following 18 years leading the software giant.
Quarterly Financial Performance
On Thursday, Adobe reported fiscal first-quarter revenue of $6.40 billion and adjusted EPS of $6.06, topping estimates of $6.28 billion and $5.87, respectively.
The company also disclosed a planned CEO transition, saying CEO Shantanu Narayen will step down after a successor is appointed while remaining board chair.
Adobe expects second-quarter revenue of $6.43 billion-$6.48 billion versus estimates of $6.43 billion and adjusted EPS of $5.80-$5.85 versus estimates of $5.68.
Adobe affirmed its full-year revenue guidance of $25.90 billion-$26.10 billion versus estimates of $26.03 billion and adjusted EPS of $23.30-$23.50 versus estimates of $23.50.
Key Takeaways From Conference Call
The company disclosed that it exceeded 850 million monthly active users across Acrobat, Creative Cloud, Express, and Firefly. This marks a 17% year-over-year (Y/Y) growth, demonstrating both robust engagement and strong monetization potential.
Also, Adobe achieved growth of over 30% Y/Y in AEP & Apps, as well as Adobe GenStudio, ending ARR.
Management stated that user growth is picking up pace, with monthly active users (MAUs) hitting new highs.
Creative freemium accounts alone exceeded 80 million MAUs, a 50% Y/Y increase, spanning web and mobile versions of Firefly, Express, Premiere, Photoshop, and Lightroom.
The company anticipates growth in MAUs for Firefly and Express, combined with rising AI adoption and monetization, to accelerate throughout the year. Adobe sees total ARR growth of 10.2% in FY26.
Stock Performance
Adobe is trading 7.1% below its 20-day SMA and 21.3% below its 100-day SMA, keeping the longer-term trend pointed lower as sellers have controlled rallies. Shares are down 28.6% over the past 12 months and are sitting much closer to the 52-week low than the high.
RSI is at 44.68, which sits in neutral territory but still reflects muted demand after the recent selloff. MACD is at -2.3162 versus a signal line of -5.3726, a bullish configuration that suggests downside momentum is easing even though the trend remains weak.
RSI in the 30–50 range with bullish MACD indicates momentum leaning bullish.
- Key Resistance: $285.50
- Key Support: $244.50
Earnings & Analyst Outlook
Looking further out, the next major catalyst for the stock arrives with the June 11, 2026 (estimated) earnings report.
- EPS Estimate: $5.23 (Up from $5.06 YoY)
- Revenue Estimate: $6.43 Billion (Up from $5.87 Billion YoY)
- Valuation: P/E of 16.2x (Suggests fair valuation relative to peers)
Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $390.45. Recent analyst moves include:
- TD Cowen: Hold (Lowers Target to $325.00) (Mar. 10)
- Wells Fargo: Overweight (Lowers Target to $405.00) (Mar. 9)
- RBC Capital: Outperform (Maintains Target to $430.00) (Mar. 9)
Benzinga Edge Rankings
Below is the Benzinga Edge scorecard for Adobe, highlighting its strengths and weaknesses compared to the broader market:
- Momentum: Weak (Score: 7.24) — The stock is lagging, which lines up with its position well below key moving averages.
- Quality: Neutral (Score: 47.38) — Fundamentals look middle-of-the-pack, suggesting execution matters more than balance-sheet optics right now.
- Value: Weak (Score: 25.22) — The valuation isn’t screaming cheap on this model, so buyers may wait for clearer trend confirmation.
The Verdict: Adobe’s Benzinga Edge signal reveals a weak-trend setup driven by poor Momentum (7.24) while Quality (47.38) stays neutral. With Value also weak (25.22), the cleaner long-term entry often comes after the stock stabilizes above support and starts reclaiming key moving averages.
Top ETF Exposure
- SmartETFs Advertising and Marketing Technology ETF (NYSE:MRAD): 4.05% Weight
- iShares Expanded Tech-Software Sector ETF (BATS:IGV): 4.82% Weight
- Invesco BuyBack Achievers ETF (NASDAQ:PKW): 3.71% Weight
Significance: Because ADBE carries significant weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
ADBE Price Action: Adobe shares were down 7.68% at $249.06 during premarket trading on Friday. The stock is trading near its 52-week low of $244.28, according to Benzinga Pro data.
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