ADOBE INC (ADBE) Stock Fundamental Analysis
NASDAQ:ADBE - Nasdaq - US00724F1012 - Common Stock
Overall ADBE gets a fundamental rating of 7 out of 10. We evaluated ADBE against 285 industry peers in the Software industry. Both the health and profitability get an excellent rating, making ADBE a very profitable company, without any liquidiy or solvency issues. 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
In the past year ADBE was profitable.
ADBE had a positive operating cash flow in the past year.
ADBE had positive earnings in each of the past 5 years.
In the past 5 years ADBE always reported a positive cash flow from operatings.
1.2 Ratios
ADBE has a better Return On Assets (18.39%) than 94.27% of its industry peers.
Looking at the Return On Equity, with a value of 39.42%, ADBE belongs to the top of the industry, outperforming 94.62% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 31.43%, ADBE belongs to the top of the industry, outperforming 98.57% of the companies in the same industry.
ADBE had an Average Return On Invested Capital over the past 3 years of 27.26%. This is significantly above the industry average of 12.12%.
The 3 year average ROIC (27.26%) for ADBE is below the current ROIC(31.43%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.39% | ||
| ROE | 39.42% | ||
| ROIC | 31.43% |
ROA(3y)18.04%
ROA(5y)18.7%
ROE(3y)35.38%
ROE(5y)35.67%
ROIC(3y)27.26%
ROIC(5y)24.7%
1.3 Margins
ADBE has a Profit Margin of 25.85%. This is amongst the best in the industry. ADBE outperforms 91.40% of its industry peers.
In the last couple of years the Profit Margin of ADBE has remained more or less at the same level.
Looking at the Operating Margin, with a value of 36.00%, ADBE belongs to the top of the industry, outperforming 97.13% of the companies in the same industry.
ADBE's Operating Margin has improved in the last couple of years.
The Gross Margin of ADBE (89.04%) is better than 95.34% of its industry peers.
In the last couple of years the Gross Margin of ADBE has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36% | ||
| PM (TTM) | 25.85% | ||
| GM | 89.04% |
OM growth 3Y-0.69%
OM growth 5Y3.18%
PM growth 3Y-5.41%
PM growth 5Y-0.43%
GM growth 3Y0.32%
GM growth 5Y0.93%
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.
ADBE has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, ADBE has less shares outstanding
The debt/assets ratio for ADBE is higher compared to a year ago.
2.2 Solvency
ADBE has an Altman-Z score of 10.41. This indicates that ADBE is financially healthy and has little risk of bankruptcy at the moment.
ADBE has a Altman-Z score of 10.41. This is amongst the best in the industry. ADBE outperforms 82.08% of its industry peers.
ADBE has a debt to FCF ratio of 0.71. This is a very positive value and a sign of high solvency as it would only need 0.71 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 0.71, ADBE is doing good in the industry, outperforming 74.19% of the companies in the same industry.
ADBE has a Debt/Equity ratio of 0.29. This is a healthy value indicating a solid balance between debt and equity.
ADBE has a worse Debt to Equity ratio (0.29) than 60.93% of its industry peers.
Although ADBE 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 | 0.29 | ||
| Debt/FCF | 0.71 | ||
| Altman-Z | 10.41 |
ROIC/WACC2.84
WACC11.08%
2.3 Liquidity
ADBE has a Current Ratio of 1.07. This is a normal value and indicates that ADBE is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of ADBE (1.07) is worse than 74.91% of its industry peers.
A Quick Ratio of 1.07 indicates that ADBE should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.07, ADBE is not doing good in the industry: 73.84% of the companies in the same industry are doing better.
The current and quick ratio evaluation for ADBE 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 | 1.07 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.62% over the past year.
Measured over the past years, ADBE shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.69% on average per year.
ADBE shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.80%.
ADBE shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.00% yearly.
EPS 1Y (TTM)14.62%
EPS 3Y13.86%
EPS 5Y18.69%
EPS Q2Q%12.65%
Revenue 1Y (TTM)10.8%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%11.05%
3.2 Future
ADBE is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.96% yearly.
ADBE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.33% yearly.
EPS Next Y13.17%
EPS Next 2Y13.17%
EPS Next 3Y12.78%
EPS Next 5Y12.96%
Revenue Next Year9.57%
Revenue Next 2Y9.86%
Revenue Next 3Y9.69%
Revenue Next 5Y11.33%
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 Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 23.69, ADBE is valued on the expensive side.
78.85% of the companies in the same industry are more expensive than ADBE, based on the Price/Earnings ratio.
ADBE's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.29.
The Price/Forward Earnings ratio is 20.93, which indicates a rather expensive current valuation of ADBE.
Based on the Price/Forward Earnings ratio, ADBE is valued a bit cheaper than the industry average as 79.21% of the companies are valued more expensively.
ADBE is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.69 | ||
| Fwd PE | 20.93 |
4.2 Price Multiples
81.72% of the companies in the same industry are more expensive than ADBE, based on the Enterprise Value to EBITDA ratio.
81.00% of the companies in the same industry are more expensive than ADBE, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.4 | ||
| EV/EBITDA | 21.72 |
4.3 Compensation for Growth
ADBE's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of ADBE may justify a higher PE ratio.
A more expensive valuation may be justified as ADBE's earnings are expected to grow with 12.78% in the coming years.
PEG (NY)1.8
PEG (5Y)1.27
EPS Next 2Y13.17%
EPS Next 3Y12.78%
5. Dividend
5.1 Amount
ADBE does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
ADOBE INC
NASDAQ:ADBE (1/21/2025, 8:00:00 PM)
After market: 436 -0.36 (-0.08%)436.36
+6.37 (+1.48%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners87.24%
Inst Owner Change-0.24%
Ins Owners0.15%
Ins Owner Change0.65%
Market Cap192.09B
Analysts80.43
Price Target604.32 (38.49%)
Short Float %1.96%
Short Ratio2.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)0.9%
Min EPS beat(2)0.66%
Max EPS beat(2)1.14%
EPS beat(4)4
Avg EPS beat(4)0.54%
Min EPS beat(4)0.06%
Max EPS beat(4)1.14%
EPS beat(8)8
Avg EPS beat(8)0.82%
EPS beat(12)9
Avg EPS beat(12)0.45%
EPS beat(16)12
Avg EPS beat(16)1.31%
Revenue beat(2)0
Avg Revenue beat(2)-1.01%
Min Revenue beat(2)-1.24%
Max Revenue beat(2)-0.78%
Revenue beat(4)0
Avg Revenue beat(4)-1.22%
Min Revenue beat(4)-1.65%
Max Revenue beat(4)-0.78%
Revenue beat(8)0
Avg Revenue beat(8)-1.29%
Revenue beat(12)0
Avg Revenue beat(12)-1.4%
Revenue beat(16)2
Avg Revenue beat(16)-1.02%
PT rev (1m)-4.8%
PT rev (3m)-5.34%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.05%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.7%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.38%
Revenue NY rev (1m)-0.15%
Revenue NY rev (3m)-1.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.69 | ||
| Fwd PE | 20.93 | ||
| P/S | 8.93 | ||
| P/FCF | 24.4 | ||
| P/OCF | 23.84 | ||
| P/B | 13.62 | ||
| P/tB | 359.04 | ||
| EV/EBITDA | 21.72 |
EPS(TTM)18.42
EY4.22%
EPS(NY)20.85
Fwd EY4.78%
FCF(TTM)17.89
FCFY4.1%
OCF(TTM)18.3
OCFY4.19%
SpS48.85
BVpS32.04
TBVpS1.22
PEG (NY)1.8
PEG (5Y)1.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 18.39% | ||
| ROE | 39.42% | ||
| ROCE | 39.28% | ||
| ROIC | 31.43% | ||
| ROICexc | 52.4% | ||
| ROICexgc | N/A | ||
| OM | 36% | ||
| PM (TTM) | 25.85% | ||
| GM | 89.04% | ||
| FCFM | 36.61% |
ROA(3y)18.04%
ROA(5y)18.7%
ROE(3y)35.38%
ROE(5y)35.67%
ROIC(3y)27.26%
ROIC(5y)24.7%
ROICexc(3y)43%
ROICexc(5y)37.74%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)34.07%
ROCE(5y)30.87%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y17.87%
ROICexc growth 5Y9.83%
OM growth 3Y-0.69%
OM growth 5Y3.18%
PM growth 3Y-5.41%
PM growth 5Y-0.43%
GM growth 3Y0.32%
GM growth 5Y0.93%
F-Score7
Asset Turnover0.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 0.71 | ||
| Debt/EBITDA | 0.48 | ||
| Cap/Depr | 21.35% | ||
| Cap/Sales | 0.85% | ||
| Interest Coverage | 82.35 | ||
| Cash Conversion | 93.7% | ||
| Profit Quality | 141.6% | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 10.41 |
F-Score7
WACC11.08%
ROIC/WACC2.84
Cap/Depr(3y)38.09%
Cap/Depr(5y)42.76%
Cap/Sales(3y)1.74%
Cap/Sales(5y)2.14%
Profit Quality(3y)141.67%
Profit Quality(5y)133.73%
High Growth Momentum
Growth
EPS 1Y (TTM)14.62%
EPS 3Y13.86%
EPS 5Y18.69%
EPS Q2Q%12.65%
EPS Next Y13.17%
EPS Next 2Y13.17%
EPS Next 3Y12.78%
EPS Next 5Y12.96%
Revenue 1Y (TTM)10.8%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%11.05%
Revenue Next Year9.57%
Revenue Next 2Y9.86%
Revenue Next 3Y9.69%
Revenue Next 5Y11.33%
EBIT growth 1Y16.41%
EBIT growth 3Y10.09%
EBIT growth 5Y17.62%
EBIT Next Year16.33%
EBIT Next 3Y11.72%
EBIT Next 5Y12.13%
FCF growth 1Y13.41%
FCF growth 3Y4.59%
FCF growth 5Y14.35%
OCF growth 1Y10.33%
OCF growth 3Y3.67%
OCF growth 5Y12.75%