Adobe's fourth-quarter guidance leads to a 9% decline in share price.

• Adobe's stock price dropped the day after the company released its third-quarter results, which included weak forecasts for the future.
• The company anticipates reporting revenue between $5.5 billion and $5.55 billion in its fourth quarter, which falls below the $5.61 billion forecasted by analysts surveyed by LSEG.
• Despite the forecast, analysts maintain a positive outlook on the stock.

On Friday, the software company's shares dropped more than 9% after its third-quarter results revealed worse-than-anticipated guidance for the fourth quarter.

LSEG reported that Adobe generated $5.41 billion in revenue for the quarter, which was 11% higher than the previous year and exceeded the analysts' expectations of $5.37 billion. Additionally, the company's net income for the period was $1.68 billion, or $3.76 per diluted share, representing a 22% increase from the year-ago period's $1.40 billion, or $3.05 per share.

Adobe anticipates revenue between $5.50 billion and $5.55 billion, and earnings per share between $4.63 and $4.68 for its fourth quarter, while analysts surveyed by LSEG predicted sales of $5.61 billion and earnings per share of $4.67.

Goldman Sachs analysts maintained their buy rating and $640 price target on Adobe stock. They noted that despite the company's disappointing outlook, the strength of its core business is being supported by the adoption of artificial intelligence and its key growth drivers remain intact.

Despite investors' concerns about the impact of guidance on upcoming DM FY25 guidance and their hesitancy about the business's maturity, we believe their reaction is exaggerated.

Bank of America's analysts reported that Adobe's results and outlook were somewhat mixed but overall healthy.

Adobe is the only company, aside from Microsoft, driving "meaningful AI generation" at scale at this point in the cycle.

"Our positive view on Adobe remains unchanged, despite our hope for a better Q4 digital media outlook. Our FY26 estimates are still increasing due to the strength of the creative cloud and document cloud."

UBS analysts stated that Adobe's fourth-quarter outlook is lackluster, but the sell-off appears excessive.

"In our opinion, the print was not a disaster," they stated on Friday.

— CNBC's Michael Bloom and Kif Leswing contributed to this report.