Three Stocks are Down for Different Reasons; What Do Hedge Funds Think About Their Long-Term Potential?

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Adobe’s new guidance of non-GAAP earnings per share compound annual growth rate (CAGR) of approximately 30% from fiscal year 2015 through fiscal year 2018 is certainly a surprise. Analysts previously expected Adobe’s earnings per share to grow by 37% annually for the next five years as demand for the Adobe’s cloud software drive earnings. Adobe’s new guidance of 20% annual revenue growth is also lower than previous expectations. 

Adobe shares have had a great run since 2012, and are still up 13% year to date. A little consolidation would be healthy for the stock and would give the company time to grow into its valuation. Shares currently trade at a forward P/E of 26.6 times forward earnings.

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