Adobe Shares Down 4% Despite Q3 Beat

Adobe Inc. (NASDAQ:ADBE) shares were trading more than 4% lower Wednesday morning, despite the company’s reported Q3 beat, with revenue growing 22% year-over-year to $3.935 billion (vs. consensus $3.895 billion).

Digital Media revenue grew 23% year-over-year to $2.865 billion, above the $2.849 billion Street estimate, however, the core Digital Media ARR missed expectations. Digital Media net-new ARR increased by $455 million, lower than in Q2 and the year-ago-period from more adverse Creative Cloud seasonality.

Despite a mixed quarter, analysts at Oppenheimer believe the fundamental outlook for the company is positive, and the quarter issue with Digital Media looks transitional. The brokerage increased its price target on the company’s shares to $680 from $600, maintaining its outperform rating.