ADOBE INC (1ADBE.MI) Stock Fundamental Analysis

Europe - Euronext Milan - BIT:1ADBE - US00724F1012 - Common Stock

256.9 EUR

+9.3 (+3.76%)

Last: 1/26/2026, 7:00:00 PM

Fundamental Rating

We assign a fundamental rating of 7 out of 10 to 1ADBE. 1ADBE was compared to 114 industry peers in the Software industry. 1ADBE scores excellent points on both the profitability and health parts. This is a solid base for a good stock. 1ADBE may be a bit undervalued, certainly considering the very reasonable score on growth This makes 1ADBE very considerable for value and quality investing!

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1. Profitability

1.1 Basic Checks

In the past year 1ADBE was profitable.
1ADBE had a positive operating cash flow in the past year.
Each year in the past 5 years 1ADBE has been profitable.
1ADBE had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

1ADBE has a Return On Assets of 24.17%. This is amongst the best in the industry. 1ADBE outperforms 92.98% of its industry peers.
1ADBE has a better Return On Equity (61.34%) than 93.86% of its industry peers.
The Return On Invested Capital of 1ADBE (36.51%) is better than 96.49% of its industry peers.
The Average Return On Invested Capital over the past 3 years for 1ADBE is significantly above the industry average of 13.49%.
The 3 year average ROIC (31.10%) for 1ADBE is below the current ROIC(36.51%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	24.17%
ROE	61.34%
ROIC	36.51%

ROA(3y)20.26%

ROA(5y)19.2%

ROE(3y)44.54%

ROE(5y)40.01%

ROIC(3y)31.1%

ROIC(5y)28.47%

1.3 Margins

1ADBE has a Profit Margin of 30.00%. This is amongst the best in the industry. 1ADBE outperforms 90.35% of its industry peers.
In the last couple of years the Profit Margin of 1ADBE has declined.
With an excellent Operating Margin value of 36.63%, 1ADBE belongs to the best of the industry, outperforming 92.98% of the companies in the same industry.
In the last couple of years the Operating Margin of 1ADBE has remained more or less at the same level.
1ADBE's Gross Margin of 89.27% is amongst the best of the industry. 1ADBE outperforms 85.96% of its industry peers.
In the last couple of years the Gross Margin of 1ADBE has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	36.63%
PM (TTM)	30%
GM	89.27%

OM growth 3Y1.88%

OM growth 5Y1.28%

PM growth 3Y3.55%

PM growth 5Y-6%

GM growth 3Y0.59%

GM growth 5Y0.6%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

1ADBE has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for 1ADBE has been reduced compared to 1 year ago.
The number of shares outstanding for 1ADBE has been reduced compared to 5 years ago.
The debt/assets ratio for 1ADBE is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 8.24 indicates that 1ADBE is not in any danger for bankruptcy at the moment.
1ADBE's Altman-Z score of 8.24 is amongst the best of the industry. 1ADBE outperforms 83.33% of its industry peers.
The Debt to FCF ratio of 1ADBE is 0.63, which is an excellent value as it means it would take 1ADBE, only 0.63 years of fcf income to pay off all of its debts.
1ADBE has a better Debt to FCF ratio (0.63) than 85.09% of its industry peers.
1ADBE has a Debt/Equity ratio of 0.53. This is a neutral value indicating 1ADBE is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.53, 1ADBE is doing worse than 66.67% of the companies in the same industry.
Although 1ADBE does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.

		Industry Rank	Sector Rank
Debt/Equity	0.53
Debt/FCF	0.63
Altman-Z	8.24

ROIC/WACC3.32

WACC11%

2.3 Liquidity

A Current Ratio of 1.00 indicates that 1ADBE may have some problems paying its short term obligations.
1ADBE's Current ratio of 1.00 is on the low side compared to the rest of the industry. 1ADBE is outperformed by 70.18% of its industry peers.
A Quick Ratio of 1.00 indicates that 1ADBE may have some problems paying its short term obligations.
1ADBE has a worse Quick ratio (1.00) than 69.30% of its industry peers.
The current and quick ratio evaluation for 1ADBE is rather negative, while it does have 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
Quick Ratio	1

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

1ADBE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.74%, which is quite good.
Measured over the past years, 1ADBE shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.87% on average per year.
The Revenue has grown by 10.53% in the past year. This is quite good.
Measured over the past years, 1ADBE shows a quite strong growth in Revenue. The Revenue has been growing by 13.06% on average per year.

EPS 1Y (TTM)13.74%

EPS 3Y15.15%

EPS 5Y15.87%

EPS Q2Q%14.35%

Revenue 1Y (TTM)10.53%

Revenue growth 3Y10.52%

Revenue growth 5Y13.06%

Sales Q2Q%10.49%

3.2 Future

The Earnings Per Share is expected to grow by 9.91% on average over the next years. This is quite good.
1ADBE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.02% yearly.

EPS Next Y14.37%

EPS Next 2Y13.61%

EPS Next 3Y12.14%

EPS Next 5Y9.91%

Revenue Next Year9.89%

Revenue Next 2Y9.49%

Revenue Next 3Y9.04%

Revenue Next 5Y8.02%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 14.63, which indicates a correct valuation of 1ADBE.
1ADBE's Price/Earnings ratio is rather cheap when compared to the industry. 1ADBE is cheaper than 86.84% of the companies in the same industry.
When comparing the Price/Earnings ratio of 1ADBE to the average of the S&P500 Index (28.82), we can say 1ADBE is valued slightly cheaper.
The Price/Forward Earnings ratio is 12.79, which indicates a correct valuation of 1ADBE.
Based on the Price/Forward Earnings ratio, 1ADBE is valued cheaper than 87.72% of the companies in the same industry.
1ADBE is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.95, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	14.63
Fwd PE	12.79

4.2 Price Multiples

1ADBE's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. 1ADBE is cheaper than 70.18% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, 1ADBE is valued cheaply inside the industry as 86.84% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	13.02
EV/EBITDA	13.31

4.3 Compensation for Growth

1ADBE's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
1ADBE has an outstanding profitability rating, which may justify a higher PE ratio.
1ADBE's earnings are expected to grow with 12.14% in the coming years. This may justify a more expensive valuation.