Adobe (ADBE) stock is trading at an all-time high of $609. Its share price has jumped more than 21 percent so far in 2021. Much of its growth has been driven by solid demand for its cloud-based products and services in recent months. Adobe was among the top beneficiaries of the Covid-19 pandemic, which forced many businesses to switch to a remote working model. The trend fueled the demand for its Document Cloud that includes PDF and e-signature products.
Strong Financial Results
The elevated demand helped Adobe report strong financial results last month. The company reported an adjusted profit of $3.03 per share for the second quarter ended June 4, well above the consensus forecast of $2.81 per share.
Total revenue for the quarter rose 23 percent to $3.84 billion, exceeding analysts’ average estimate of $3.73 billion. Revenue from its flagship digital media segment climbed 25 percent on a year-over-year basis to $2.79 billion. The segment includes Adobe’s famous apps such as Photoshop and Illustrator.
Looking forward, the company expects its digital media revenue to surge 22 percent on a year-over-year basis in the third quarter. Moreover, it expects to report an adjusted profit of $3 per share and sales of $3.88 billion for the current quarter. The third-quarter outlook is better than the average estimate by most analysts.
The shift to the work-from-home model has created a massive opportunity for companies like Adobe, which has a suite of cloud-based software that can help enterprises streamline their digital operations. In short, the strong demand for its flagship products will continue to boost the value of Adobe stock in the coming quarters.