ADOBE INC (ADBE) Fundamental Analysis & Valuation
NASDAQ:ADBE • US00724F1012
Current stock price
246.1 USD
+2.53 (+1.04%)
At close:
249.26 USD
+3.16 (+1.28%)
After Hours:
This ADBE fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
1. ADBE Profitability Analysis
1.1 Basic Checks
- In the past year ADBE was profitable.
- In the past year ADBE had a positive cash flow from operations.
- Each year in the past 5 years ADBE has been profitable.
- ADBE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- ADBE's Return On Assets of 24.27% is amongst the best of the industry. ADBE outperforms 96.69% of its industry peers.
- With an excellent Return On Equity value of 63.05%, ADBE belongs to the best of the industry, outperforming 96.69% of the companies in the same industry.
- ADBE has a better Return On Invested Capital (39.60%) than 98.16% of its industry peers.
- ADBE had an Average Return On Invested Capital over the past 3 years of 31.10%. This is significantly above the industry average of 11.04%.
- The 3 year average ROIC (31.10%) for ADBE is below the current ROIC(39.60%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 24.27% | ||
| ROE | 63.05% | ||
| ROIC | 39.6% |
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
- ADBE has a Profit Margin of 29.48%. This is amongst the best in the industry. ADBE outperforms 91.91% of its industry peers.
- In the last couple of years the Profit Margin of ADBE has declined.
- ADBE has a better Operating Margin (36.65%) than 96.32% of its industry peers.
- In the last couple of years the Operating Margin of ADBE has remained more or less at the same level.
- Looking at the Gross Margin, with a value of 89.40%, ADBE belongs to the top of the industry, outperforming 96.69% 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 | 36.65% | ||
| PM (TTM) | 29.48% | ||
| GM | 89.4% |
OM growth 3Y1.88%
OM growth 5Y1.28%
PM growth 3Y3.55%
PM growth 5Y-6%
GM growth 3Y0.59%
GM growth 5Y0.6%
2. ADBE Health Analysis
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.
- The number of shares outstanding for ADBE has been reduced compared to 1 year ago.
- ADBE has less shares outstanding than it did 5 years ago.
- ADBE has a worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 7.23 indicates that ADBE is not in any danger for bankruptcy at the moment.
- ADBE has a Altman-Z score of 7.23. This is amongst the best in the industry. ADBE outperforms 83.46% of its industry peers.
- ADBE has a debt to FCF ratio of 0.60. This is a very positive value and a sign of high solvency as it would only need 0.60 years to pay back of all of its debts.
- ADBE has a Debt to FCF ratio of 0.60. This is in the better half of the industry: ADBE outperforms 76.84% of its industry peers.
- A Debt/Equity ratio of 0.47 indicates that ADBE is not too dependend on debt financing.
- With a Debt to Equity ratio value of 0.47, ADBE is not doing good in the industry: 66.18% of the companies in the same industry are doing better.
- Even though the debt/equity ratio score it not favorable for ADBE, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 0.6 | ||
| Altman-Z | 7.23 |
ROIC/WACC3.65
WACC10.85%
2.3 Liquidity
- ADBE has a Current Ratio of 0.91. This is a bad value and indicates that ADBE is not financially healthy enough and could expect problems in meeting its short term obligations.
- ADBE has a Current ratio of 0.91. This is amonst the worse of the industry: ADBE underperforms 80.15% of its industry peers.
- A Quick Ratio of 0.91 indicates that ADBE may have some problems paying its short term obligations.
- ADBE has a worse Quick ratio (0.91) than 78.68% 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 | 0.91 | ||
| Quick Ratio | 0.91 |
3. ADBE Growth Analysis
3.1 Past
- The Earnings Per Share has grown by an nice 15.30% over the past year.
- ADBE shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.87% yearly.
- ADBE shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.96%.
- ADBE shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 13.06% yearly.
EPS 1Y (TTM)15.3%
EPS 3Y15.15%
EPS 5Y15.87%
EPS Q2Q%19.29%
Revenue 1Y (TTM)10.96%
Revenue growth 3Y10.52%
Revenue growth 5Y13.06%
Sales Q2Q%11.97%
3.2 Future
- Based on estimates for the next years, ADBE will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.65% on average per year.
- The Revenue is expected to grow by 9.93% on average over the next years. This is quite good.
EPS Next Y14.67%
EPS Next 2Y13.37%
EPS Next 3Y12.96%
EPS Next 5Y9.65%
Revenue Next Year9.92%
Revenue Next 2Y9.34%
Revenue Next 3Y9.01%
Revenue Next 5Y9.93%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. ADBE Valuation Analysis
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 11.22, the valuation of ADBE can be described as reasonable.
- Based on the Price/Earnings ratio, ADBE is valued cheaper than 87.13% of the companies in the same industry.
- ADBE's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.77.
- With a Price/Forward Earnings ratio of 9.14, the valuation of ADBE can be described as very reasonable.
- ADBE's Price/Forward Earnings ratio is rather cheap when compared to the industry. ADBE is cheaper than 87.87% of the companies in the same industry.
- ADBE is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.75, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.22 | ||
| Fwd PE | 9.14 |
4.2 Price Multiples
- ADBE's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ADBE is cheaper than 87.87% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, ADBE is valued cheaply inside the industry as 90.07% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.64 | ||
| EV/EBITDA | 9.99 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap 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 12.96% in the coming years.
PEG (NY)0.77
PEG (5Y)0.71
EPS Next 2Y13.37%
EPS Next 3Y12.96%
5. ADBE Dividend Analysis
5.1 Amount
- ADBE does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
ADBE Fundamentals: All Metrics, Ratios and Statistics
246.1
+2.53 (+1.04%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Industry Strength6.83
Industry Growth64.6
Earnings (Last)03-12 2026-03-12/amc
Earnings (Next)06-10 2026-06-10/amc
Inst Owners88.63%
Inst Owner Change-0.72%
Ins Owners0.19%
Ins Owner Change6.14%
Market Cap99.47B
Revenue(TTM)24.45B
Net Income(TTM)7.21B
Analysts72.44
Price Target331.26 (34.6%)
Short Float %3.66%
Short Ratio2.49
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.56%
Min EPS beat(2)-0.04%
Max EPS beat(2)1.17%
EPS beat(4)2
Avg EPS beat(4)0.4%
Min EPS beat(4)-0.06%
Max EPS beat(4)1.17%
EPS beat(8)6
Avg EPS beat(8)0.46%
EPS beat(12)10
Avg EPS beat(12)0.6%
EPS beat(16)12
Avg EPS beat(16)0.52%
Revenue beat(2)0
Avg Revenue beat(2)-0.32%
Min Revenue beat(2)-0.59%
Max Revenue beat(2)-0.05%
Revenue beat(4)0
Avg Revenue beat(4)-0.45%
Min Revenue beat(4)-0.6%
Max Revenue beat(4)-0.05%
Revenue beat(8)0
Avg Revenue beat(8)-0.81%
Revenue beat(12)0
Avg Revenue beat(12)-0.99%
Revenue beat(16)0
Avg Revenue beat(16)-1.13%
PT rev (1m)-21.82%
PT rev (3m)-24.13%
EPS NQ rev (1m)0.07%
EPS NQ rev (3m)2.77%
EPS NY rev (1m)0.24%
EPS NY rev (3m)0.26%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0.53%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)0.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.22 | ||
| Fwd PE | 9.14 | ||
| P/S | 4.07 | ||
| P/FCF | 9.64 | ||
| P/OCF | 9.47 | ||
| P/B | 8.7 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.99 |
EPS(TTM)21.93
EY8.91%
EPS(NY)26.92
Fwd EY10.94%
FCF(TTM)25.52
FCFY10.37%
OCF(TTM)25.99
OCFY10.56%
SpS60.5
BVpS28.29
TBVpS-4.68
PEG (NY)0.77
PEG (5Y)0.71
Graham Number118.139 (-52%)
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 24.27% | ||
| ROE | 63.05% | ||
| ROCE | 48.93% | ||
| ROIC | 39.6% | ||
| ROICexc | 63.48% | ||
| ROICexgc | N/A | ||
| OM | 36.65% | ||
| PM (TTM) | 29.48% | ||
| GM | 89.4% | ||
| FCFM | 42.19% |
ROA(3y)20.26%
ROA(5y)19.2%
ROE(3y)44.54%
ROE(5y)40.01%
ROIC(3y)31.1%
ROIC(5y)28.47%
ROICexc(3y)49.26%
ROICexc(5y)43.65%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)38.43%
ROCE(5y)35.18%
ROICexgc growth 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3Y13.31%
ROICexc growth 5Y14.65%
OM growth 3Y1.88%
OM growth 5Y1.28%
PM growth 3Y3.55%
PM growth 5Y-6%
GM growth 3Y0.59%
GM growth 5Y0.6%
F-Score8
Asset Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 0.6 | ||
| Debt/EBITDA | 0.55 | ||
| Cap/Depr | 24.52% | ||
| Cap/Sales | 0.78% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 107.92% | ||
| Profit Quality | 143.13% | ||
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.91 | ||
| Altman-Z | 7.23 |
F-Score8
WACC10.85%
ROIC/WACC3.65
Cap/Depr(3y)28.17%
Cap/Depr(5y)36.06%
Cap/Sales(3y)1.15%
Cap/Sales(5y)1.63%
Profit Quality(3y)135.89%
Profit Quality(5y)141.18%
High Growth Momentum
Growth
EPS 1Y (TTM)15.3%
EPS 3Y15.15%
EPS 5Y15.87%
EPS Q2Q%19.29%
EPS Next Y14.67%
EPS Next 2Y13.37%
EPS Next 3Y12.96%
EPS Next 5Y9.65%
Revenue 1Y (TTM)10.96%
Revenue growth 3Y10.52%
Revenue growth 5Y13.06%
Sales Q2Q%11.97%
Revenue Next Year9.92%
Revenue Next 2Y9.34%
Revenue Next 3Y9.01%
Revenue Next 5Y9.93%
EBIT growth 1Y12.05%
EBIT growth 3Y12.6%
EBIT growth 5Y14.5%
EBIT Next Year13.91%
EBIT Next 3Y8.56%
EBIT Next 5Y9.31%
FCF growth 1Y59.04%
FCF growth 3Y10.03%
FCF growth 5Y13.17%
OCF growth 1Y54.9%
OCF growth 3Y8.57%
OCF growth 5Y11.86%
ADOBE INC / ADBE Fundamental Analysis FAQ
What is the ChartMill fundamental rating of ADOBE INC (ADBE) stock?
ChartMill assigns a fundamental rating of 7 / 10 to ADBE.
What is the valuation status of ADOBE INC (ADBE) stock?
ChartMill assigns a valuation rating of 9 / 10 to ADOBE INC (ADBE). This can be considered as Undervalued.
How profitable is ADOBE INC (ADBE) stock?
ADOBE INC (ADBE) has a profitability rating of 9 / 10.
Can you provide the PE and PB ratios for ADBE stock?
The Price/Earnings (PE) ratio for ADOBE INC (ADBE) is 11.22 and the Price/Book (PB) ratio is 8.7.
How financially healthy is ADOBE INC?
The financial health rating of ADOBE INC (ADBE) is 7 / 10.