ADOBE INC (ADBE) Stock Fundamental Analysis
USA - NASDAQ:ADBE - US00724F1012 - Common Stock
328.85 USD
+1.9 (+0.58%)
328.3 USD
-0.55 (-0.17%)
Taking everything into account, ADBE scores 7 out of 10 in our fundamental rating. ADBE was compared to 281 industry peers in the Software industry. ADBE gets an excellent profitability rating and is at the same time showing great financial health properties. ADBE may be a bit undervalued, certainly considering the very reasonable score on growth With these ratings, ADBE could be worth investigating further for value and 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.
Each year in the past 5 years ADBE has 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 24.19%, ADBE belongs to the best of the industry, outperforming 97.15% of the companies in the same industry.
With an excellent Return On Equity value of 59.11%, ADBE belongs to the best of the industry, outperforming 97.15% of the companies in the same industry.
ADBE's Return On Invested Capital of 34.45% is amongst the best of the industry. ADBE outperforms 97.51% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ADBE is significantly above the industry average of 11.82%.
The last Return On Invested Capital (34.45%) for ADBE is above the 3 year average (27.26%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 24.19% | ||
| ROE | 59.11% | ||
| ROIC | 34.46% |
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's Profit Margin of 30.01% is amongst the best of the industry. ADBE outperforms 91.10% of its industry peers.
ADBE's Profit Margin has been stable in the last couple of years.
ADBE has a better Operating Margin (36.25%) than 94.31% of its industry peers.
ADBE's Operating Margin has improved in the last couple of years.
ADBE's Gross Margin of 89.14% is amongst the best of the industry. ADBE outperforms 95.73% of its industry peers.
ADBE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36.25% | ||
| PM (TTM) | 30.01% | ||
| GM | 89.14% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 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.
Compared to 1 year ago, ADBE has a worse debt to assets ratio.
2.2 Solvency
ADBE has an Altman-Z score of 8.76. This indicates that ADBE is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 8.76, ADBE belongs to the best of the industry, outperforming 83.63% of the companies in the same industry.
ADBE has a debt to FCF ratio of 0.65. This is a very positive value and a sign of high solvency as it would only need 0.65 years to pay back of all of its debts.
ADBE has a better Debt to FCF ratio (0.65) than 79.00% of its industry peers.
A Debt/Equity ratio of 0.53 indicates that ADBE is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.53, ADBE is not doing good in the industry: 65.12% of the companies in the same industry are doing better.
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 | 0.53 | ||
| Debt/FCF | 0.65 | ||
| Altman-Z | 8.76 |
ROIC/WACC3.18
WACC10.82%
2.3 Liquidity
A Current Ratio of 1.02 indicates that ADBE should not have too much problems paying its short term obligations.
ADBE's Current ratio of 1.02 is on the low side compared to the rest of the industry. ADBE is outperformed by 72.24% of its industry peers.
A Quick Ratio of 1.02 indicates that ADBE should not have too much problems paying its short term obligations.
ADBE's Quick ratio of 1.02 is on the low side compared to the rest of the industry. ADBE is outperformed by 70.82% 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 | 1.02 | ||
| Quick Ratio | 1.02 |
3. Growth
3.1 Past
ADBE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.31%, 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.
ADBE shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.67%.
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)13.31%
EPS 3Y13.86%
EPS 5Y18.69%
EPS Q2Q%14.19%
Revenue 1Y (TTM)10.67%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%10.72%
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 11.20% on average per year.
The Revenue is expected to grow by 8.95% on average over the next years. This is quite good.
EPS Next Y15.35%
EPS Next 2Y13.74%
EPS Next 3Y13.35%
EPS Next 5Y11.2%
Revenue Next Year10.46%
Revenue Next 2Y9.86%
Revenue Next 3Y9.64%
Revenue Next 5Y8.95%
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 16.23 indicates a correct valuation of ADBE.
Based on the Price/Earnings ratio, ADBE is valued cheaper than 80.78% of the companies in the same industry.
ADBE is valuated rather cheaply when we compare the Price/Earnings ratio to 26.28, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 13.80, the valuation of ADBE can be described as correct.
ADBE's Price/Forward Earnings ratio is rather cheap when compared to the industry. ADBE is cheaper than 83.63% of the companies in the same industry.
ADBE is valuated cheaply when we compare the Price/Forward Earnings ratio to 33.61, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.23 | ||
| Fwd PE | 13.8 |
4.2 Price Multiples
ADBE's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ADBE is cheaper than 84.70% of the companies in the same industry.
87.19% 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 | 14.34 | ||
| EV/EBITDA | 14.8 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ADBE has an outstanding profitability rating, which may justify a higher PE ratio.
ADBE's earnings are expected to grow with 13.35% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.06
PEG (5Y)0.87
EPS Next 2Y13.74%
EPS Next 3Y13.35%
5. Dividend
5.1 Amount
No dividends for ADBE!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
328.85
+1.9 (+0.58%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners86.03%
Inst Owner Change-1.3%
Ins Owners0.16%
Ins Owner Change1.16%
Market Cap137.66B
Revenue(TTM)23.18B
Net Income(TTM)6.96B
Analysts78.72
Price Target473.01 (43.84%)
Short Float %2.76%
Short Ratio2.61
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)0.24%
Min EPS beat(2)-0.06%
Max EPS beat(2)0.55%
EPS beat(4)3
Avg EPS beat(4)0.45%
Min EPS beat(4)-0.06%
Max EPS beat(4)1.15%
EPS beat(8)7
Avg EPS beat(8)0.5%
EPS beat(12)11
Avg EPS beat(12)0.67%
EPS beat(16)11
Avg EPS beat(16)0.26%
Revenue beat(2)0
Avg Revenue beat(2)-0.58%
Min Revenue beat(2)-0.6%
Max Revenue beat(2)-0.56%
Revenue beat(4)0
Avg Revenue beat(4)-0.73%
Min Revenue beat(4)-0.99%
Max Revenue beat(4)-0.56%
Revenue beat(8)0
Avg Revenue beat(8)-1.08%
Revenue beat(12)0
Avg Revenue beat(12)-1.21%
Revenue beat(16)0
Avg Revenue beat(16)-1.27%
PT rev (1m)0%
PT rev (3m)-6.34%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.06%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)0.88%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)0.45%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.23 | ||
| Fwd PE | 13.8 | ||
| P/S | 5.94 | ||
| P/FCF | 14.34 | ||
| P/OCF | 14.06 | ||
| P/B | 11.7 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.8 |
EPS(TTM)20.26
EY6.16%
EPS(NY)23.83
Fwd EY7.25%
FCF(TTM)22.93
FCFY6.97%
OCF(TTM)23.39
OCFY7.11%
SpS55.38
BVpS28.12
TBVpS-3.93
PEG (NY)1.06
PEG (5Y)0.87
Graham Number113.21
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 24.19% | ||
| ROE | 59.11% | ||
| ROCE | 43.05% | ||
| ROIC | 34.46% | ||
| ROICexc | 49.53% | ||
| ROICexgc | 4255.63% | ||
| OM | 36.25% | ||
| PM (TTM) | 30.01% | ||
| GM | 89.14% | ||
| FCFM | 41.41% |
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%
ROICexgc growth 3YN/A
ROICexgc 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 Turnover0.81
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 0.65 | ||
| Debt/EBITDA | 0.67 | ||
| Cap/Depr | 22.65% | ||
| Cap/Sales | 0.83% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 105.81% | ||
| Profit Quality | 137.98% | ||
| Current Ratio | 1.02 | ||
| Quick Ratio | 1.02 | ||
| Altman-Z | 8.76 |
F-Score7
WACC10.82%
ROIC/WACC3.18
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)13.31%
EPS 3Y13.86%
EPS 5Y18.69%
EPS Q2Q%14.19%
EPS Next Y15.35%
EPS Next 2Y13.74%
EPS Next 3Y13.35%
EPS Next 5Y11.2%
Revenue 1Y (TTM)10.67%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%10.72%
Revenue Next Year10.46%
Revenue Next 2Y9.86%
Revenue Next 3Y9.64%
Revenue Next 5Y8.95%
EBIT growth 1Y11.62%
EBIT growth 3Y10.09%
EBIT growth 5Y17.62%
EBIT Next Year17.42%
EBIT Next 3Y11.33%
EBIT Next 5Y10.2%
FCF growth 1Y25.87%
FCF growth 3Y4.59%
FCF growth 5Y14.35%
OCF growth 1Y21.94%
OCF growth 3Y3.67%
OCF growth 5Y12.75%
ADOBE INC / ADBE FAQ
What is the ChartMill fundamental rating of ADOBE INC (ADBE) stock?
ChartMill assigns a fundamental rating of 7 / 10 to ADBE.
Can you provide the valuation status for ADOBE INC?
ChartMill assigns a valuation rating of 8 / 10 to ADOBE INC (ADBE). This can be considered as Undervalued.
What is the profitability of ADBE stock?
ADOBE INC (ADBE) has a profitability rating of 9 / 10.
What are the PE and PB ratios of ADOBE INC (ADBE) stock?
The Price/Earnings (PE) ratio for ADOBE INC (ADBE) is 16.23 and the Price/Book (PB) ratio is 11.7.
What is the financial health of ADOBE INC (ADBE) stock?
The financial health rating of ADOBE INC (ADBE) is 7 / 10.