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 282 industry peers in the Software industry. ADBE has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. ADBE is valued quite cheap, while showing a decent growth score. This is a good combination! This makes ADBE very considerable for value and 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.
In the past 5 years ADBE has always been profitable.
ADBE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 24.44%, ADBE belongs to the best of the industry, outperforming 96.45% of the companies in the same industry.
With an excellent Return On Equity value of 60.00%, ADBE belongs to the best of the industry, outperforming 96.81% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 34.50%, ADBE belongs to the top of the industry, outperforming 97.52% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ADBE is significantly above the industry average of 12.28%.
The last Return On Invested Capital (34.50%) for ADBE is above the 3 year average (27.26%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 24.44% | ||
| ROE | 60% | ||
| ROIC | 34.5% |
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
Looking at the Profit Margin, with a value of 30.39%, ADBE belongs to the top of the industry, outperforming 94.33% 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.
ADBE's Operating Margin of 36.37% is amongst the best of the industry. ADBE outperforms 96.45% of its industry peers.
In the last couple of years the Operating Margin of ADBE has grown nicely.
With an excellent Gross Margin value of 89.25%, ADBE belongs to the best of the industry, outperforming 96.81% of the companies in the same industry.
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 | 36.37% | ||
| PM (TTM) | 30.39% | ||
| GM | 89.25% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ADBE is creating value.
Compared to 1 year ago, ADBE has less shares outstanding
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 9.55 indicates that ADBE is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 9.55, ADBE belongs to the best of the industry, outperforming 82.98% of the companies in the same industry.
The Debt to FCF ratio of ADBE is 0.65, which is an excellent value as it means it would take ADBE, only 0.65 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.65, ADBE is in the better half of the industry, outperforming 77.31% of the companies in the same industry.
A Debt/Equity ratio of 0.54 indicates that ADBE is somewhat dependend on debt financing.
ADBE's Debt to Equity ratio of 0.54 is on the low side compared to the rest of the industry. ADBE is outperformed by 65.60% of its industry peers.
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 | 0.54 | ||
| Debt/FCF | 0.65 | ||
| Altman-Z | 9.55 |
ROIC/WACC3.21
WACC10.75%
2.3 Liquidity
A Current Ratio of 0.99 indicates that ADBE may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.99, ADBE is doing worse than 74.47% of the companies in the same industry.
ADBE has a Quick Ratio of 0.99. This is a bad value and indicates that ADBE is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of ADBE (0.99) is worse than 73.40% of its industry peers.
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 | 0.99 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
ADBE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.16%, which is quite good.
ADBE shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.69% yearly.
The Revenue has grown by 10.63% in the past year. This is quite good.
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)13.16%
EPS 3Y13.86%
EPS 5Y18.69%
EPS Q2Q%12.95%
Revenue 1Y (TTM)10.63%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%10.62%
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 11.03% yearly.
ADBE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.28% yearly.
EPS Next Y14.24%
EPS Next 2Y13.33%
EPS Next 3Y13.28%
EPS Next 5Y11.03%
Revenue Next Year9.89%
Revenue Next 2Y9.67%
Revenue Next 3Y9.65%
Revenue Next 5Y9.28%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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 18.54, which indicates a rather expensive current valuation of ADBE.
Based on the Price/Earnings ratio, ADBE is valued cheaper than 81.91% of the companies in the same industry.
When comparing the Price/Earnings ratio of ADBE to the average of the S&P500 Index (27.30), we can say ADBE is valued slightly cheaper.
A Price/Forward Earnings ratio of 15.36 indicates a correct valuation of ADBE.
Based on the Price/Forward Earnings ratio, ADBE is valued cheaper than 84.75% of the companies in the same industry.
ADBE is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.54 | ||
| Fwd PE | 15.36 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ADBE is valued cheaply inside the industry as 85.11% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ADBE indicates a rather cheap valuation: ADBE is cheaper than 88.30% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.41 | ||
| EV/EBITDA | 17.49 |
4.3 Compensation for Growth
The 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.
ADBE's earnings are expected to grow with 13.28% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.3
PEG (5Y)0.99
EPS Next 2Y13.33%
EPS Next 3Y13.28%
5. Dividend
5.1 Amount
No dividends for ADBE!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
363.35
-8.08 (-2.18%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners86.09%
Inst Owner Change0%
Ins Owners0.16%
Ins Owner Change3.95%
Market Cap154.86B
Analysts80
Price Target509.34 (40.18%)
Short Float %1.76%
Short Ratio2.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
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)0.06%
Min EPS beat(2)-0.06%
Max EPS beat(2)0.18%
EPS beat(4)3
Avg EPS beat(4)0.48%
Min EPS beat(4)-0.06%
Max EPS beat(4)1.15%
EPS beat(8)7
Avg EPS beat(8)0.53%
EPS beat(12)10
Avg EPS beat(12)0.62%
EPS beat(16)11
Avg EPS beat(16)0.3%
Revenue beat(2)0
Avg Revenue beat(2)-0.77%
Min Revenue beat(2)-0.99%
Max Revenue beat(2)-0.56%
Revenue beat(4)0
Avg Revenue beat(4)-0.89%
Min Revenue beat(4)-1.24%
Max Revenue beat(4)-0.56%
Revenue beat(8)0
Avg Revenue beat(8)-1.2%
Revenue beat(12)0
Avg Revenue beat(12)-1.32%
Revenue beat(16)0
Avg Revenue beat(16)-1.29%
PT rev (1m)0.1%
PT rev (3m)-5.66%
EPS NQ rev (1m)1.37%
EPS NQ rev (3m)1.33%
EPS NY rev (1m)1.32%
EPS NY rev (3m)1.18%
Revenue NQ rev (1m)0.38%
Revenue NQ rev (3m)0.35%
Revenue NY rev (1m)0.53%
Revenue NY rev (3m)0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.54 | ||
| Fwd PE | 15.36 | ||
| P/S | 6.85 | ||
| P/FCF | 16.41 | ||
| P/OCF | 16.11 | ||
| P/B | 13.53 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.49 |
EPS(TTM)19.6
EY5.39%
EPS(NY)23.66
Fwd EY6.51%
FCF(TTM)22.14
FCFY6.09%
OCF(TTM)22.56
OCFY6.21%
SpS53.03
BVpS26.86
TBVpS-4.72
PEG (NY)1.3
PEG (5Y)0.99
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 24.44% | ||
| ROE | 60% | ||
| ROCE | 43.11% | ||
| ROIC | 34.5% | ||
| ROICexc | 46.41% | ||
| ROICexgc | 918.86% | ||
| OM | 36.37% | ||
| PM (TTM) | 30.39% | ||
| GM | 89.25% | ||
| FCFM | 41.75% |
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 Turnover0.8
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.54 | ||
| Debt/FCF | 0.65 | ||
| Debt/EBITDA | 0.68 | ||
| Cap/Depr | 20.77% | ||
| Cap/Sales | 0.79% | ||
| Interest Coverage | 51.06 | ||
| Cash Conversion | 105.92% | ||
| Profit Quality | 137.39% | ||
| Current Ratio | 0.99 | ||
| Quick Ratio | 0.99 | ||
| Altman-Z | 9.55 |
F-Score7
WACC10.75%
ROIC/WACC3.21
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)13.16%
EPS 3Y13.86%
EPS 5Y18.69%
EPS Q2Q%12.95%
EPS Next Y14.24%
EPS Next 2Y13.33%
EPS Next 3Y13.28%
EPS Next 5Y11.03%
Revenue 1Y (TTM)10.63%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%10.62%
Revenue Next Year9.89%
Revenue Next 2Y9.67%
Revenue Next 3Y9.65%
Revenue Next 5Y9.28%
EBIT growth 1Y13.68%
EBIT growth 3Y10.09%
EBIT growth 5Y17.62%
EBIT Next Year16.09%
EBIT Next 3Y11.14%
EBIT Next 5Y10.02%
FCF growth 1Y27.13%
FCF growth 3Y4.59%
FCF growth 5Y14.35%
OCF growth 1Y22.31%
OCF growth 3Y3.67%
OCF growth 5Y12.75%