ADOBE INC (ADBE) Stock Fundamental Analysis
USA - NASDAQ:ADBE - US00724F1012 - Common Stock
349.36 USD
-1.19 (-0.34%)
348.69 USD
-0.67 (-0.19%)
We assign a fundamental rating of 7 out of 10 to ADBE. ADBE was compared to 280 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.
ADBE had a positive operating cash flow in the past year.
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
Looking at the Return On Assets, with a value of 24.44%, ADBE belongs to the top of the industry, outperforming 96.43% of the companies in the same industry.
ADBE has a Return On Equity of 60.00%. This is amongst the best in the industry. ADBE outperforms 96.43% of its industry peers.
The Return On Invested Capital of ADBE (34.50%) is better than 97.86% 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 11.85%.
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
With an excellent Profit Margin value of 30.39%, ADBE belongs to the best of the industry, outperforming 91.07% 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 has a better Operating Margin (36.37%) than 94.64% of its industry peers.
ADBE's Operating Margin has improved in the last couple of years.
ADBE has a better Gross Margin (89.25%) than 95.36% 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 | 36.37% | ||
| 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.
ADBE has less shares outstanding than it did 1 year ago.
The number of shares outstanding for ADBE has been reduced compared to 5 years ago.
The debt/assets ratio for ADBE is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 9.18 indicates that ADBE is not in any danger for bankruptcy at the moment.
ADBE has a better Altman-Z score (9.18) than 83.93% of its industry peers.
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.
With a decent Debt to FCF ratio value of 0.65, ADBE is doing good in the industry, outperforming 77.86% of the companies in the same industry.
A Debt/Equity ratio of 0.54 indicates that ADBE is somewhat dependend on debt financing.
The Debt to Equity ratio of ADBE (0.54) is worse than 67.14% 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 | 9.18 |
ROIC/WACC3.17
WACC10.88%
2.3 Liquidity
ADBE has a Current 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.
Looking at the Current ratio, with a value of 0.99, ADBE is doing worse than 72.86% 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.
ADBE's Quick ratio of 0.99 is on the low side compared to the rest of the industry. ADBE is outperformed by 71.79% 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 | 0.99 | ||
| 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 13.31%, which is quite good.
The Earnings Per Share has been growing by 18.69% on average over the past years. This is quite good.
The Revenue has grown by 10.67% 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)13.31%
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
The Earnings Per Share is expected to grow by 10.04% on average over the next years. This is quite good.
ADBE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.89% yearly.
EPS Next Y14.35%
EPS Next 2Y13.44%
EPS Next 3Y13.25%
EPS Next 5Y10.04%
Revenue Next Year10.34%
Revenue Next 2Y9.84%
Revenue Next 3Y9.61%
Revenue Next 5Y8.89%
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 17.24, which indicates a rather expensive current valuation of ADBE.
Based on the Price/Earnings ratio, ADBE is valued cheaply inside the industry as 81.07% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.30, ADBE is valued a bit cheaper.
ADBE is valuated correctly with a Price/Forward Earnings ratio of 14.74.
Based on the Price/Forward Earnings ratio, ADBE is valued cheaper than 85.36% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.73. ADBE is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.24 | ||
| Fwd PE | 14.74 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ADBE is valued cheaper than 84.29% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ADBE is valued cheaply inside the industry as 88.93% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.7 | ||
| EV/EBITDA | 16.38 |
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 13.25% in the coming years.
PEG (NY)1.2
PEG (5Y)0.92
EPS Next 2Y13.44%
EPS Next 3Y13.25%
5. Dividend
5.1 Amount
No dividends for ADBE!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
349.36
-1.19 (-0.34%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners86.81%
Inst Owner Change-1.91%
Ins Owners0.16%
Ins Owner Change2.14%
Market Cap148.20B
Analysts78.26
Price Target479.28 (37.19%)
Short Float %2.37%
Short Ratio2.71
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)-5.1%
PT rev (3m)-5.27%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.52%
EPS NY rev (1m)0.01%
EPS NY rev (3m)1.42%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.57%
Revenue NY rev (1m)0.37%
Revenue NY rev (3m)0.93%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.24 | ||
| Fwd PE | 14.74 | ||
| P/S | 6.56 | ||
| P/FCF | 15.7 | ||
| P/OCF | 15.41 | ||
| P/B | 12.95 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.38 |
EPS(TTM)20.26
EY5.8%
EPS(NY)23.71
Fwd EY6.79%
FCF(TTM)22.25
FCFY6.37%
OCF(TTM)22.67
OCFY6.49%
SpS53.28
BVpS26.99
TBVpS-4.75
PEG (NY)1.2
PEG (5Y)0.92
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 | 9.18 |
F-Score7
WACC10.88%
ROIC/WACC3.17
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 Y14.35%
EPS Next 2Y13.44%
EPS Next 3Y13.25%
EPS Next 5Y10.04%
Revenue 1Y (TTM)10.67%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%10.72%
Revenue Next Year10.34%
Revenue Next 2Y9.84%
Revenue Next 3Y9.61%
Revenue Next 5Y8.89%
EBIT growth 1Y13.68%
EBIT growth 3Y10.09%
EBIT growth 5Y17.62%
EBIT Next Year16.1%
EBIT Next 3Y11.11%
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%