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Adobe announced better-than-expected fourth-quarter earnings

Adobe Inc (NASDAQ:ADBE) stock is surging today, up 7.6% at $353.77 at last glance, after the company’s fourth-quarter earnings report. The software name reported better-than-expected profits of $3.60 per share and revenue in line with estimates, as well as a full-year forecast exceeding analyst expectations. Adobe also announced its plans to buy web application startup Figma. 

No fewer than nine analysts raised their price targets after the event, with the highest coming from Evercore ISI, who moved up to $425 from $350. The 12-month consensus price target of $387.31 is a 12.8% premium to current levels. Of the 22 analysts in coverage, nine carry a “buy” or better rating, with 13 a “hold.” 

Options traders are targeting ADBE at nine times the average intraday amount, with 37,000 calls and 35,000 puts across the tape so far. The December 335 put is the most popular, with new positions being opened there. 

Today’s options activity shows a slight shift in sentiment, as 1.29 puts have been bought for every call in the last 10 days at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks higher than 86% of readings from the past year, showing puts being picked up at a more rapid pace than usual. 

Options might be a good way to go, too, as the security’s Schaeffer’s Volatility Scorecard (SVS) sits at a 92 out of 100, meaning ADBE has exceeded option traders’ volatility expectations during the past year.

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By admin