On Thursday, Adobe stock plunged 10% after the software company provided a revenue forecast for the fiscal first quarter that fell far short of analysts' expectations.
The stock had its second-worst collapse in a decade, trailing only a 15% drop in mid-March of last year, when coronavirus fears shook the markets. Adobe's three worst trading days of the year were in December, knocking the stock down 16% for the month and putting it on track for its largest monthly drop since June 2010.
According to Refinitiv, Adobe's revenue for the fiscal first quarter, which runs through February 2022, will be $4.23 billion, falling short of analysts' expectations of $4.34 billion. Adobe estimates revenue of $17.9 billion for the full year, which is lower than analysts' average estimate of $18.16 billion.
After Adobe's fourth-quarter earnings report, analysts from Atlantic Equities wrote, "We believe the shares will be down today as fears about a slowing expenditure environment and conservative forecast proven to be correct." The company has a buy rating from the firm, which believes the outlook matches the "muted spending environment" seen across the sector.
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