Earnings vs. Price: Recovery Watch — all editions
Week ended October 2, 2026 · Edition 1
Growing earnings do not establish a stock-price turnaround
The argument sounds straightforward: earnings are growing, the P/E is lower, therefore the stock must recover. The first two observations can be correct while the conclusion remains unproven.
Adobe and Qualcomm make that distinction visible. Adobe's reported adjusted earnings have grown, but its stock remains below both the 50- and 200-day averages. Qualcomm's earnings have weakened, yet its share price has recovered above those averages after a deep selloff.
For the main comparison, both stocks use trailing adjusted P/E, calculated from the latest four reported quarters available at each date. There is no forward-versus-trailing mismatch in the paired chart.
The displayed year is October 3, 2025–October 2, 2026. Price panels have separate dollar scales. Earnings indices begin at 100 on the same start date; they show changes rather than imply that an absolute dollar of EPS is comparable across companies.
The October 2 snapshot
| Observation | Adobe — ADBE | Qualcomm — QCOM |
|---|---|---|
| Regular-session close | $237.69 | $184.87 |
| Latest four reported quarterly adjusted EPS, summed | $23.65 | $11.36 |
| Trailing adjusted P/E | 10.1× | 16.3× |
| 50-day simple moving average | $258.49 | $171.45 |
| 200-day simple moving average | $259.87 | $169.26 |
| Price versus those averages | Below both | Above both |
| Trailing adjusted EPS change across the displayed year | +16.7% | −3.1% |
| Latest reported fiscal Q3 adjusted EPS change year over year | +15.4% | −20.2% |
The latest fiscal quarters have different end dates: Adobe's ended August 28, Qualcomm's June 28. Both were publicly reported before the price cutoff. The same trailing calculation improves consistency, but company-defined adjustments, fiscal calendars and business risks still differ. A lower P/E alone does not establish superior value. Adobe Q3 results · Qualcomm Q3 results · ADBE price history · QCOM price history
Adobe: earnings rose while investors paid a lower multiple
At its highest close in the displayed year, October 28, 2025, Adobe stood at $359.91. Its then-available trailing adjusted EPS totaled $20.26, putting the multiple at 17.8×.
By October 2, 2026, the stock had fallen 34.0% to $237.69. The earnings denominator had risen 16.7% to $23.65, while the multiple fell 43.4% to 10.1×.
That is the central example: earnings improved and valuation became lower, while shareholders still experienced a substantial price decline. Earnings growth did not force investors to keep paying the former multiple.
The latest earnings release supports the operating side of the case. Q3 revenue grew 13% to $6.76 billion, GAAP diluted EPS increased from $4.18 to $4.62, and adjusted EPS increased from $5.31 to $6.13. Management raised its annual revenue and earnings targets. Adobe Q3 results and outlook
EPS growth also reflects a smaller share count. Q3 adjusted net income grew from $2.252 billion to $2.424 billion, about 7.6%, while diluted shares fell from 424 million to 395 million. That helps explain why per-share growth was stronger than total adjusted-profit growth. It is useful to check cash generation, total profits and share repurchases alongside EPS.
The chart supplies a separate assessment: price ended below the 50-day and 200-day averages after earlier rebounds failed to establish a sustained recovery. Neither average is a mandatory buy trigger. Holding recovered ranges, forming higher lows and improving relative performance would add evidence; another closing low or a failed reclaim would weaken it.
QCOM: the selloff was deeper than the remaining gap to its peak
QCOM's May 29, 2026 closing peak was $251.02, at 21.1× then-available trailing adjusted EPS of $11.92. The subsequent closing low was $147.61 on July 31, at 13.0× EPS of $11.36.
That was a 41.2% closing-price decline. Price then rebounded 25.2% to October 2's $184.87 close, recovering above both averages. It still stood 26.4% below the May peak. Measuring only peak-to-current performance would conceal how far the stock fell before the rebound.
During the peak-to-low decline, trailing adjusted EPS fell 4.7%, while P/E fell 38.3%. The comparison chart's −3.1% earnings change uses the full October-to-October window; these are different starting points.
QCOM therefore is not an example of unchanged earnings. Q2 FY2026 adjusted EPS declined 7% year over year, and Q3 declined 20%. July's Q4 adjusted EPS guidance was $2.05–$2.25. Management discussed higher input costs and a challenging memory and supply environment. Q2 results · Q3 results and outlook
The sequence illustrates multiple compression during a selloff, followed by separate price repair. The arithmetic describes the changes; it does not isolate what caused investors to sell or what drove the rebound. Recovery can fail, even after a return above moving averages.
Which earnings are underneath the P/E?
The current denominators are auditable:
- ADBE: $5.50 + $6.06 + $5.96 + $6.13 = $23.65.
- QCOM: $3.00 + $3.50 + $2.65 + $2.21 = $11.36.
Each daily P/E uses only results reported by that date. After-close releases change the denominator from the next trading session. We do not divide old prices by today's earnings, and we do not reconstruct historical analyst forecasts from current estimates.
These are sums of rounded non-GAAP diluted quarterly EPS. They can differ slightly from a company's full-year EPS because of rounding and weighted share counts. Non-GAAP exclusions also differ and require examination of the reconciliations. Adobe excludes specified compensation, amortization and other items. QCOM's GAAP figures include large tax-accounting swings that its adjusted figures exclude. This is a consistent calculation method, not perfectly identical accounting. Adobe Q4 FY2025 · Q1 FY2026 · Q2 FY2026 · Q3 FY2026 · Qualcomm Q4 FY2025 · Q1 FY2026
A “cheapest ever” statement requires more: a defined window and a consistent historical earnings basis. This study makes no all-time-low valuation claim.
What we will watch next week
| Question | Adobe | Qualcomm |
|---|---|---|
| Are results supporting the earnings case? | Check profits, cash generation, repurchases and delivery against guidance | Check whether recent earnings weakness stabilizes and the outlook improves |
| Is price recovery developing or holding? | Watch for higher lows and sustained recovery of rejected ranges | Watch whether recovered ranges and the broader trend hold |
| Is the multiple changing for a different reason? | Separate price moves from newly reported earnings | Separate price moves from newly reported earnings |
| What would challenge our assessment? | Continued earnings strength with fresh price lows keeps the disagreement open | Losing recovered levels would weaken the current repair case |
These are observation rules, not a backtested strategy or an ordered set of required steps. Buying before confirmation and waiting for more evidence involve different risks.
Current assessment: Adobe has growing reported adjusted earnings and an unconfirmed price recovery. QCOM has weaker recent earnings and more evidence of price repair. Neither conclusion determines fair value or future returns.
For the separate APP case, read the AppLovin stock review. Its forecast fiscal-year P/E remains labeled separately and is not mixed into this matched trailing comparison.
Published October 3, 2026. Prices through October 2; reported earnings available at each date. Educational commentary. No personalized trade recommendation.