September 21, 2010

ADOBE $ADBE FALL IS A BUYING OPPORTUNITY

Adobe is trading down 15% after its earnings. Adobe reported third quarter earnings of $0.54 per share, $0.05 better than the consensus of $0.49 and revenues rose 42.0% year/year to $990.3 mln vs the $985 mln consensus.

The stock is falling because investors are focusing on the revenue projections. Adobe projects Q4 revs of $0.950-1.000 bln vs. $1.03 bln consensus.

Our fundamental view on Adobe has been positive. After analyzing the earnings report and projections with a fine tooth comb, our fundamental view on the company remains positive. The stock passes all six screens of the ZYX Change Method. We have been waiting for a trigger signal and today’s drop provides the entry trigger.

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September 21, 2010