Analysts Are Punting Their Calls Into the Next Quarter After Adobe's Mixed Earnings

Analysts Are Punting Their Calls Into the Next Quarter After Adobe’s Mixed Earnings Written by Dan Schmidt | Reviewed by Clare Titus September 14, 2026 Add As Preferred Source Share Share Share This Article Link copied to clipboard. Close Key Points Adobe reported an earnings beat and raised guidance, but shares still fell as underlying growth appeared weaker once the Semrush acquisition's contribution was excluded. Management declined to offer fiscal 2027 guidance, prompting a mixed analyst response with some price targets rising and others, including JPMorgan Chase and Jefferies, being cut. ADBE shares have broken below key technical levels, including the 50-day and 200-day moving averages, with the RSI signaling sellers remain in control. MarketBeat previews top five stocks to own in October . The software business is a tough industry these days. A $100 billion company trading at 14 times earnings can report a double beat and raise guidance, and its stock still might sell off afterward. That’s exactly what happened to Adobe Inc. NASDAQ: ADBE when it reported its fiscal Q3 2026 results after hours on Sept. 10. The stock had been slowly recovering some of its losses over the last few months, but was still down nearly 30% on the year. And despite the strong headline numbers, this earnings report did little to dispel market fears. Get Adobe alerts: Sign Up M&A Makes Headline Numbers Appear Stronger Than Reality When Adobe’s fiscal Q3 2026 results first hit the screen, it appeared to be a clean-cut beat. The company reported record quarterly revenue of $6.76 billion, up 12.9% year over year (YOY). Adobe Today ADBE Adobe $263.40 +11.17 (+4.43%) As of 02:40 PM Eastern This is a fair market value price provided by Massive. Learn more. 52-Week Range $190.12 ▼ $370.86 P/E Ratio 14.69 Price Target $282.68 Add to Watchlist Earnings per share (EPS) also surpassed expectations, total ending annualized recurring revenue (ARR) was up 11.2% YOY to $27.50 billion, and management raised full-year 2026 EPS and revenue projections ahead of the final fiscal quarter. But it’s that total ending ARR number that spiked the punchbowl, and it needs scrutiny due to the Semrush acquisition. Earlier this year, Adobe acquired Semrush for $1.9 billion, with the transaction closing in Q2. Management projected Semrush to add $480 million in ending ARR, and fiscal Q3 was the first full quarter in which it realized this, with subscription revenue projected at $280 million for the period. If you subtract the M&A-aided portion of ending ARR from the total, you’re left with a growth rate in the single digits, not 11.2%. Management admitted that its push to add new members through “freemium” products contributed to a 36%-37% YOY decline in new net ARR, and this likely caused the sell-off. Current remaining performance obligation (cRPO) growth of 9% also lags revenue, suggesting forward demand growth is slowing relative to recognized revenue. Guidance Projections Have Analysts Punting to Q4 The market hoped for color on fiscal 2027 projections, but management offered only fiscal Q4 updates and deferred all 2027 calls. Management expects fiscal Q4 revenue of $6.80 billion to $6.85 billion, bringing the full-year 2026 projection range to $26.58 billion to $26.63 billion. Year-end operating margin is projected at approximately 45%, with full-year EPS between $18.12 and $18.17. But analysts weren’t impressed with the guide, especially since the company failed to make any 2027 projections amidst its freemium software push. When information is scarce, the market will confirm its priors, and analysts will kick the can down the road. And that’s the pattern playing out in the analyst community following Adobe’s earnings results. Of the 33 analysts covering ADBE shares, seven adjusted their price targets on the Friday after the conference call. Among the five who raised, the average target climbed from $235 to $259. Meanwhile, JPMorgan Chase cut its target from $340 to $315.