ADOBE INC (ADBE)
US00724F1012 - Common Stock
ADBE gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 277 industry peers in the Software industry. ADBE scores excellent points on both the profitability and health parts. This is a solid base for a good stock. ADBE has a correct valuation and a medium growth rate. These ratings would make ADBE suitable for quality investing!
1. Profitability
1.1 Basic Checks
ADBE had positive earnings in the past year.
In the past year ADBE had a positive cash flow from operations.
ADBE had positive earnings in each of the past 5 years.
ADBE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of ADBE (16.70%) is better than 94.93% of its industry peers.
ADBE has a better Return On Equity (31.05%) than 94.20% of its industry peers.
The Return On Invested Capital of ADBE (28.84%) is better than 98.55% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ADBE is significantly above the industry average of 10.18%.
The 3 year average ROIC (25.17%) for ADBE is below the current ROIC(28.84%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.7% | ||
| ROE | 31.05% | ||
| ROIC | 28.84% |
ROA(3y)17.81%
ROA(5y)17.86%
ROE(3y)33.1%
ROE(5y)33.4%
ROIC(3y)25.17%
ROIC(5y)23.19%
1.3 Margins
ADBE's Profit Margin of 24.08% is amongst the best of the industry. ADBE outperforms 92.75% of its industry peers.
In the last couple of years the Profit Margin of ADBE has remained more or less at the same level.
ADBE has a Operating Margin of 34.97%. This is amongst the best in the industry. ADBE outperforms 98.19% of its industry peers.
In the last couple of years the Operating Margin of ADBE has grown nicely.
Looking at the Gross Margin, with a value of 88.08%, ADBE belongs to the top of the industry, outperforming 94.57% of the companies in the same industry.
ADBE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.97% | ||
| PM (TTM) | 24.08% | ||
| GM | 88.08% |
OM growth 3Y1.15%
OM growth 5Y2.49%
PM growth 3Y-11.88%
PM growth 5Y-0.51%
GM growth 3Y0.48%
GM growth 5Y0.25%
2. Health
2.1 Basic Checks
ADBE has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, ADBE has less shares outstanding
Compared to 5 years ago, ADBE has less shares outstanding
ADBE has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 12.94 indicates that ADBE is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 12.94, ADBE belongs to the best of the industry, outperforming 90.22% of the companies in the same industry.
ADBE has a debt to FCF ratio of 0.56. This is a very positive value and a sign of high solvency as it would only need 0.56 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.56, ADBE is in the better half of the industry, outperforming 78.99% of the companies in the same industry.
ADBE has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
ADBE has a Debt to Equity ratio (0.14) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.56 | ||
| Altman-Z | 12.94 |
ROIC/WACC2.93
WACC9.85%
2.3 Liquidity
A Current Ratio of 1.05 indicates that ADBE should not have too much problems paying its short term obligations.
The Current ratio of ADBE (1.05) is worse than 75.36% of its industry peers.
ADBE has a Quick Ratio of 1.05. This is a normal value and indicates that ADBE is financially healthy and should not expect problems in meeting its short term obligations.
ADBE's Quick ratio of 1.05 is on the low side compared to the rest of the industry. ADBE is outperformed by 74.28% of its industry peers.
ADBE does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 18.37% over the past year.
The Earnings Per Share has been growing by 18.63% on average over the past years. This is quite good.
ADBE shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.76%.
The Revenue has been growing by 16.54% on average over the past years. This is quite good.
EPS 1Y (TTM)18.37%
EPS 3Y17.01%
EPS 5Y18.63%
EPS growth Q2Q17.89%
Revenue 1Y (TTM)10.76%
Revenue growth 3Y14.68%
Revenue growth 5Y16.54%
Revenue growth Q2Q11.32%
3.2 Future
The Earnings Per Share is expected to grow by 13.32% on average over the next years. This is quite good.
Based on estimates for the next years, ADBE will show a quite strong growth in Revenue. The Revenue will grow by 10.99% on average per year.
EPS Next Y14.45%
EPS Next 2Y13.71%
EPS Next 3Y14.1%
EPS Next 5Y13.32%
Revenue Next Year10.76%
Revenue Next 2Y11.14%
Revenue Next 3Y11.32%
Revenue Next 5Y10.99%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 28.86, the valuation of ADBE can be described as expensive.
Based on the Price/Earnings ratio, ADBE is valued a bit cheaper than the industry average as 75.72% of the companies are valued more expensively.
ADBE is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.60, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 23.27 indicates a rather expensive valuation of ADBE.
Based on the Price/Forward Earnings ratio, ADBE is valued a bit cheaper than 76.09% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ADBE to the average of the S&P500 Index (20.15), we can say ADBE is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.86 | ||
| Fwd PE | 23.27 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ADBE is valued a bit cheaper than the industry average as 78.99% of the companies are valued more expensively.
ADBE's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ADBE is cheaper than 73.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.39 | ||
| EV/EBITDA | 27.14 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ADBE does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of ADBE may justify a higher PE ratio.
ADBE's earnings are expected to grow with 14.10% in the coming years. This may justify a more expensive valuation.
PEG (NY)2
PEG (5Y)1.55
EPS Next 2Y13.71%
EPS Next 3Y14.1%
5. Dividend
5.1 Amount
No dividends for ADBE!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
ADOBE INC
NASDAQ:ADBE (5/17/2024, 7:00:00 PM)
After market: 483.22 -0.21 (-0.04%)483.43
+0.55 (+0.11%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap216.58B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.86 | ||
| Fwd PE | 23.27 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2
PEG (5Y)1.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.7% | ||
| ROE | 31.05% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 34.97% | ||
| PM (TTM) | 24.08% | ||
| GM | 88.08% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.69
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)18.37%
EPS 3Y17.01%
EPS 5Y
EPS growth Q2Q
EPS Next Y14.45%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)10.76%
Revenue growth 3Y14.68%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y