ADOBE INC (ADBE) Stock Fundamental Analysis
NASDAQ:ADBE - Nasdaq - US00724F1012 - Common Stock - Currency: USD
ADBE gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 283 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 has a decent growth rate and is not valued too expensively. With these ratings, ADBE could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
In the past year ADBE was profitable.
In the past year ADBE had a positive cash flow from operations.
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
With an excellent Return On Assets value of 22.54%, ADBE belongs to the best of the industry, outperforming 96.47% of the companies in the same industry.
ADBE has a Return On Equity of 51.55%. This is amongst the best in the industry. ADBE outperforms 95.05% of its industry peers.
With an excellent Return On Invested Capital value of 30.78%, ADBE belongs to the best of the industry, outperforming 97.88% 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 11.25%.
The 3 year average ROIC (27.26%) for ADBE is below the current ROIC(30.78%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.54% | ||
| ROE | 51.55% | ||
| ROIC | 30.78% |
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 better Profit Margin (30.63%) than 92.93% of its industry peers.
In the last couple of years the Profit Margin of ADBE has remained more or less at the same level.
The Operating Margin of ADBE (36.29%) is better than 96.47% of its industry peers.
ADBE's Operating Margin has improved in the last couple of years.
The Gross Margin of ADBE (89.15%) is better than 95.76% of its industry peers.
ADBE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36.29% | ||
| PM (TTM) | 30.63% | ||
| GM | 89.15% |
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.
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 8.85 indicates that ADBE is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 8.85, ADBE belongs to the best of the industry, outperforming 84.45% of the companies in the same industry.
ADBE has a debt to FCF ratio of 0.67. This is a very positive value and a sign of high solvency as it would only need 0.67 years to pay back of all of its debts.
ADBE's Debt to FCF ratio of 0.67 is fine compared to the rest of the industry. ADBE outperforms 75.27% of its industry peers.
A Debt/Equity ratio of 0.47 indicates that ADBE is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.47, ADBE is doing worse than 64.31% of the companies in the same industry.
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 | 0.47 | ||
| Debt/FCF | 0.67 | ||
| Altman-Z | 8.85 |
ROIC/WACC2.87
WACC10.72%
2.3 Liquidity
ADBE has a Current Ratio of 1.18. This is a normal value and indicates that ADBE is financially healthy and should not expect problems in meeting its short term obligations.
ADBE's Current ratio of 1.18 is on the low side compared to the rest of the industry. ADBE is outperformed by 66.43% of its industry peers.
ADBE has a Quick Ratio of 1.18. This is a normal value and indicates that ADBE is financially healthy and should not expect problems in meeting its short term obligations.
ADBE's Quick ratio of 1.18 is on the low side compared to the rest of the industry. ADBE is outperformed by 66.43% 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 | 1.18 | ||
| Quick Ratio | 1.18 |
3. Growth
3.1 Past
ADBE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.55%, which is quite good.
The Earnings Per Share has been growing by 18.69% on average over the past years. This is quite good.
Looking at the last year, ADBE shows a quite strong growth in Revenue. The Revenue has grown by 10.54% in the last year.
Measured over the past years, ADBE shows a quite strong growth in Revenue. The Revenue has been growing by 14.00% on average per year.
EPS 1Y (TTM)13.55%
EPS 3Y13.86%
EPS 5Y18.69%
EPS Q2Q%13.39%
Revenue 1Y (TTM)10.54%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%10.27%
3.2 Future
The Earnings Per Share is expected to grow by 11.51% on average over the next years. This is quite good.
Based on estimates for the next years, ADBE will show a quite strong growth in Revenue. The Revenue will grow by 9.39% on average per year.
EPS Next Y12.91%
EPS Next 2Y12.67%
EPS Next 3Y12.59%
EPS Next 5Y11.51%
Revenue Next Year9.5%
Revenue Next 2Y9.69%
Revenue Next 3Y9.72%
Revenue Next 5Y9.39%
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
A Price/Earnings ratio of 18.34 indicates a rather expensive 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 75.97% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.31. ADBE is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 14.92, ADBE is valued correctly.
Based on the Price/Forward Earnings ratio, ADBE is valued cheaper than 84.45% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.14, ADBE is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.34 | ||
| Fwd PE | 14.92 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ADBE is valued cheaper than 83.04% of the companies in the same industry.
ADBE's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ADBE is cheaper than 84.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.17 | ||
| EV/EBITDA | 16.56 |
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 12.59% in the coming years.
PEG (NY)1.42
PEG (5Y)0.98
EPS Next 2Y12.67%
EPS Next 3Y12.59%
5. Dividend
5.1 Amount
ADBE does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
348.8
+4.61 (+1.34%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners85.27%
Inst Owner Change0.02%
Ins Owners0.16%
Ins Owner Change2.95%
Market Cap148.66B
Analysts80
Price Target539.88 (54.78%)
Short Float %1.77%
Short Ratio2.07
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)2
Avg EPS beat(2)0.66%
Min EPS beat(2)0.18%
Max EPS beat(2)1.15%
EPS beat(4)4
Avg EPS beat(4)0.51%
Min EPS beat(4)0.06%
Max EPS beat(4)1.15%
EPS beat(8)8
Avg EPS beat(8)0.69%
EPS beat(12)10
Avg EPS beat(12)0.56%
EPS beat(16)12
Avg EPS beat(16)0.66%
Revenue beat(2)0
Avg Revenue beat(2)-0.88%
Min Revenue beat(2)-0.99%
Max Revenue beat(2)-0.78%
Revenue beat(4)0
Avg Revenue beat(4)-1.16%
Min Revenue beat(4)-1.65%
Max Revenue beat(4)-0.78%
Revenue beat(8)0
Avg Revenue beat(8)-1.25%
Revenue beat(12)0
Avg Revenue beat(12)-1.36%
Revenue beat(16)1
Avg Revenue beat(16)-1.2%
PT rev (1m)-7.35%
PT rev (3m)-10.66%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.74%
EPS NY rev (1m)-0.08%
EPS NY rev (3m)-0.23%
Revenue NQ rev (1m)-0.07%
Revenue NQ rev (3m)-1.61%
Revenue NY rev (1m)-0.08%
Revenue NY rev (3m)-0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.34 | ||
| Fwd PE | 14.92 | ||
| P/S | 6.75 | ||
| P/FCF | 16.17 | ||
| P/OCF | 15.88 | ||
| P/B | 11.35 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.56 |
EPS(TTM)19.02
EY5.45%
EPS(NY)23.38
Fwd EY6.7%
FCF(TTM)21.57
FCFY6.18%
OCF(TTM)21.97
OCFY6.3%
SpS51.71
BVpS30.73
TBVpS-0.91
PEG (NY)1.42
PEG (5Y)0.98
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.54% | ||
| ROE | 51.55% | ||
| ROCE | 38.46% | ||
| ROIC | 30.78% | ||
| ROICexc | 47.91% | ||
| ROICexgc | N/A | ||
| OM | 36.29% | ||
| PM (TTM) | 30.63% | ||
| GM | 89.15% | ||
| FCFM | 41.71% |
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-Score8
Asset Turnover0.74
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 0.67 | ||
| Debt/EBITDA | 0.69 | ||
| Cap/Depr | 19.95% | ||
| Cap/Sales | 0.78% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 105.7% | ||
| Profit Quality | 136.16% | ||
| Current Ratio | 1.18 | ||
| Quick Ratio | 1.18 | ||
| Altman-Z | 8.85 |
F-Score8
WACC10.72%
ROIC/WACC2.87
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)13.55%
EPS 3Y13.86%
EPS 5Y18.69%
EPS Q2Q%13.39%
EPS Next Y12.91%
EPS Next 2Y12.67%
EPS Next 3Y12.59%
EPS Next 5Y11.51%
Revenue 1Y (TTM)10.54%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%10.27%
Revenue Next Year9.5%
Revenue Next 2Y9.69%
Revenue Next 3Y9.72%
Revenue Next 5Y9.39%
EBIT growth 1Y14.72%
EBIT growth 3Y10.09%
EBIT growth 5Y17.62%
EBIT Next Year16.13%
EBIT Next 3Y11.14%
EBIT Next 5Y9.86%
FCF growth 1Y25.59%
FCF growth 3Y4.59%
FCF growth 5Y14.35%
OCF growth 1Y20.64%
OCF growth 3Y3.67%
OCF growth 5Y12.75%