Adobe shares fall on lower than expected net new media ARR, says DA Davidson

DA Davidson analyst Gil Luria keeps a Buy rating and $685 price target on Adobe after its Q3 earnings and guidance. The company reported “strong results”, but the stock fell due to a lower than expected net new digital media ARR – NNDMARR- and Q4 revenue guide, though the management noted that the lighter than expected NNDMARR outlook was primarily due to the timing of enterprise deals previously believed to be signed in Q4, the analyst tells investors in a research note. The firm adds that the underlying fundamentals this quarter were positive, with operating margins exceeding expectations and favorable usage trends pointing to strong adoption of GenAI enabled offerings, DA Davidson noted.