ADOBE INC (ADBE) Stock Fundamental Analysis
NASDAQ:ADBE - Nasdaq - US00724F1012 - Common Stock - Currency: USD
Taking everything into account, ADBE scores 7 out of 10 in our fundamental rating. ADBE was compared to 284 industry peers in the Software industry. ADBE gets an excellent profitability rating and is at the same time showing great financial health properties. ADBE is not valued too expensively and it also shows a decent 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.
In the past 5 years ADBE has always been profitable.
In the past 5 years ADBE always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 18.39%, ADBE belongs to the top of the industry, outperforming 94.93% of the companies in the same industry.
The Return On Equity of ADBE (39.42%) is better than 94.20% of its industry peers.
With an excellent Return On Invested Capital value of 31.43%, ADBE belongs to the best of the industry, outperforming 98.19% 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 11.91%.
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
With an excellent Profit Margin value of 25.85%, ADBE belongs to the best of the industry, outperforming 91.67% of the companies in the same industry.
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 97.10% of the companies in the same industry.
In the last couple of years the Operating Margin of ADBE has grown nicely.
ADBE has a better Gross Margin (89.04%) than 95.29% 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
ADBE has a worse debt/assets ratio than last year.
2.2 Solvency
ADBE has an Altman-Z score of 10.73. This indicates that ADBE is financially healthy and has little risk of bankruptcy at the moment.
ADBE's Altman-Z score of 10.73 is amongst the best of the industry. ADBE outperforms 81.88% of its industry peers.
The Debt to FCF ratio of ADBE is 0.71, which is an excellent value as it means it would take ADBE, only 0.71 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.71, ADBE is in the better half of the industry, outperforming 73.19% of the companies in the same industry.
A Debt/Equity ratio of 0.29 indicates that ADBE is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.29, ADBE is not doing good in the industry: 60.14% 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 | 0.29 | ||
| Debt/FCF | 0.71 | ||
| Altman-Z | 10.73 |
ROIC/WACC2.25
WACC13.95%
2.3 Liquidity
A Current Ratio of 1.07 indicates that ADBE should not have too much problems paying its short term obligations.
The Current ratio of ADBE (1.07) is worse than 73.91% of its industry peers.
ADBE has a Quick 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.
ADBE has a worse Quick ratio (1.07) than 73.19% 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 | 1.07 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
ADBE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.62%, which is quite good.
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.
Looking at the last year, ADBE shows a quite strong growth in Revenue. The Revenue has grown by 10.80% in the last year.
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
Based on estimates for the next years, ADBE will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.62% on average per year.
Based on estimates for the next years, ADBE will show a quite strong growth in Revenue. The Revenue will grow by 9.40% on average per year.
EPS Next Y13%
EPS Next 2Y13%
EPS Next 3Y12.51%
EPS Next 5Y11.62%
Revenue Next Year9.57%
Revenue Next 2Y9.85%
Revenue Next 3Y9.67%
Revenue Next 5Y9.4%
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 24.12, which indicates a rather expensive current valuation of ADBE.
Compared to the rest of the industry, the Price/Earnings ratio of ADBE indicates a somewhat cheap valuation: ADBE is cheaper than 76.81% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.63, ADBE is valued at the same level.
A Price/Forward Earnings ratio of 21.35 indicates a rather expensive valuation of ADBE.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ADBE indicates a rather cheap valuation: ADBE is cheaper than 80.07% of the companies listed in the same industry.
ADBE's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.12 | ||
| Fwd PE | 21.35 |
4.2 Price Multiples
82.97% of the companies in the same industry are more expensive than ADBE, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, ADBE is valued a bit cheaper than the industry average as 79.71% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.57 | ||
| EV/EBITDA | 22.73 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ADBE has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ADBE's earnings are expected to grow with 12.51% in the coming years.
PEG (NY)1.86
PEG (5Y)1.29
EPS Next 2Y13%
EPS Next 3Y12.51%
5. Dividend
5.1 Amount
No dividends for ADBE!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
444.32
-10.37 (-2.28%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners87.24%
Inst Owner Change-1.92%
Ins Owners0.15%
Ins Owner Change2.1%
Market Cap193.42B
Analysts80.44
Price Target591.63 (33.15%)
Short Float %1.78%
Short Ratio1.8
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)0.91%
Min EPS beat(2)0.66%
Max EPS beat(2)1.15%
EPS beat(4)4
Avg EPS beat(4)0.54%
Min EPS beat(4)0.06%
Max EPS beat(4)1.15%
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)-2.1%
PT rev (3m)-6.98%
EPS NQ rev (1m)0.43%
EPS NQ rev (3m)1.48%
EPS NY rev (1m)-0.15%
EPS NY rev (3m)-0.71%
Revenue NQ rev (1m)-1.23%
Revenue NQ rev (3m)-1.6%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.12 | ||
| Fwd PE | 21.35 | ||
| P/S | 8.99 | ||
| P/FCF | 24.57 | ||
| P/OCF | 24.01 | ||
| P/B | 13.71 | ||
| P/tB | 361.53 | ||
| EV/EBITDA | 22.73 |
EPS(TTM)18.42
EY4.15%
EPS(NY)20.81
Fwd EY4.68%
FCF(TTM)18.09
FCFY4.07%
OCF(TTM)18.51
OCFY4.17%
SpS49.4
BVpS32.4
TBVpS1.23
PEG (NY)1.86
PEG (5Y)1.29
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 | 10.73 |
F-Score7
WACC13.95%
ROIC/WACC2.25
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%
EPS Next 2Y13%
EPS Next 3Y12.51%
EPS Next 5Y11.62%
Revenue 1Y (TTM)10.8%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%11.05%
Revenue Next Year9.57%
Revenue Next 2Y9.85%
Revenue Next 3Y9.67%
Revenue Next 5Y9.4%
EBIT growth 1Y16.41%
EBIT growth 3Y10.09%
EBIT growth 5Y17.62%
EBIT Next Year16.33%
EBIT Next 3Y11.72%
EBIT Next 5Y9.91%
FCF growth 1Y13.41%
FCF growth 3Y4.59%
FCF growth 5Y14.35%
OCF growth 1Y10.33%
OCF growth 3Y3.67%
OCF growth 5Y12.75%