1. Setup Recap
Original prediction (ADBE, after the close): called for a downside gap (mid-single-digit risk) on the idea that the setup needed a “prove-it” quarter and a confident forward message to justify the AI-era multiple.
What the base case expected: a solid print, but guidance/tone that failed to reset the narrative, leaving room for a sell-the-news reaction.
Key evidence emphasis (from the preview framing): elevated expectations + valuation sensitivity, where forward visibility mattered as much as the quarter.
2. Results vs Expectations
Reported results vs consensus:
- EPS beat consensus (adjusted EPS 5.50 vs 5.40 expected).
- Revenue beat consensus (6.19B vs 6.11B expected).
Guidance and management tone:
- Forward outlook landed better than the Street expected, with Q1 revenue guidance and full-year revenue guidance above expectations.
- Tone read as confident around demand for AI-driven tools, but the tape still treated “AI monetization proof” as the main debate.
Qualitative surprises:
- The numbers and outlook were not the problem; the market’s reaction looked more like positioning/expectations whiplash than a fundamentals miss.
3. Price Action & Scoreboard
Because this was after-the-close, the scoring window is: report-day close → next-day open/close.
- Pre-earnings close: 343.13
- Reaction-day open: 341.65
- Reaction-day close: 350.43
Computed:
- Earnings gap return: -0.00431 (down)
- Session return: 0.02128 (up)
Scoreboard:
- Opening gap direction vs prediction: matched (down, but small).
- Full-session direction vs prediction: did not match (reversed to green by the close).
- Meaningful reversal: yes — flat/down open turned into a solid up close.
4. Options, Flows & Example Structures
Options/vol:
- I don’t have auditable post-print implied-vol/skew snapshots in the captured sources here, so I’m not going to guess the vol crush or skew moves.
Flows / positioning:
- Not enough observable flow/short-interest updates in-scope to score cleanly.
Example structures:
- The specific structures from the prediction aren’t available in the sources captured here, so I’m not going to “grade” particular spreads/condors.
5. Hindsight on Reasoning & Weights
- Fundamentals/guidance: stronger than feared — the model’s “prove-it” anxiety was too heavy relative to what the company delivered.
- Tape mechanics: the key miss was assuming a negative open would persist; instead, buyers stepped in and the close told the story.
Weight check:
- Too much weight on valuation/expectations creating downside asymmetry; not enough weight on “clean beat + strong guide” being enough to stabilize the session.
6. Lessons & Playbook Updates
Ticker-specific:
- For ADBE, a better-than-expected forward message can override a shaky open; the close matters more than the initial print.
Process tweak:
- When the company delivers both a beat and an above-consensus outlook, treat “fade risk” as real: the open can be misleading.