On the 30th anniversary of the 1987 Black Monday crash, the market started the day in the red but gradually rose during the session, with the Dow Jones Industrial Average (^DJI 1.05%) and the S&P 500 (^GSPC 1.05%) posting tiny gains to mark record highs.
Today's stock market
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Interest-rate-sensitive utilities led the market today, with the Utilities Select SPDR ETF (XLU 2.45%) gaining 1%. Consumer stocks were a drag on the indexes, and the Consumer Staples Select Sector SPDR ETF (XLP 1.44%) gave up 0.5%.
Adobe gets investors excited about 2018
Shares of software maker Adobe Systems jumped 12.2% to a record high today after the company gave an outlook for 2018 profits that exceeded what analysts were expecting. At the Adobe Max conference in Las Vegas, executives provided their first projection for fiscal 2018, which begins Dec. 1, saying that they expect non-GAAP earnings per share will be about $5.50, which was significantly above analyst estimates of $5.21. Total revenue is projected to be about $8.7 billion, roughly in line with Wall Street expectations. Adobe also reaffirmed current-quarter guidance for revenue of $1.95 billion and non-GAAP EPS of $1.15.
CEO Shantanu Narayen said in the press release, "The FY2018 targets we are providing today include revenue growth of 20 percent and earnings growth of 30 percent, and reflect our continued momentum and leadership."
Adobe's surprising profit growth is coming from increased recurring revenue from subscriptions, a high-margin business. The company expects to add $1 billion of new annualized recurring revenue from its digital media segment in 2018. The effect of this subscription growth will be to increase non-GAAP operating margin from 33.8% in 2016 to around 40% in 2018. Investors clearly feel that Adobe's profit trajectory will be even more lucrative than previously thought.
MongoDB makes a splash in first day of trading
Database software vendor MongoDB made its debut as a public company today, and investors snapped up the shares, sending the stock price up 33.6%. MongoDB became the latest tech company to issue a separate class of shares with less voting rights to the public, as it issued 8 million shares of Class A shares for trading today, while keeping back 40.9 million shares of Class B stock with 10 times the votes per share for earlier investors and insiders. After today's close, the company is valued at a market capitalization of $1.57 billion.
MongoDB sells subscriptions to a database system that is an alternative to relational databases, the technology that has been around since the '70s and is sold by companies like Oracle. The non-relational database technology, sometimes referred to as NoSQL, is touted to be more easily scalable on today's cloud-based environments, where huge databases need to be connected to a rapidly evolving set of applications and the data needs to be distributed and "always on."
MongoDB has been growing rapidly. It has over 4,300 customers in more than 85 countries, and revenue grew 60% in fiscal 2016 and 55% in 2017 to $101 million. The company is not yet making a profit, though, losing $1.14 per share on a pro forma basis in the first six months of this year, with a $2.28-per-share loss in the fiscal year ending in January 2017.
Investors jumped at the chance to get in on MongoDB stock. The shares were offered at $24, opened at $33, and closed at $32.07.