ADOBE INC (ADBE) Stock Fundamental Analysis
NASDAQ:ADBE - Nasdaq - US00724F1012 - Common Stock - Currency: USD
Overall ADBE gets a fundamental rating of 7 out of 10. We evaluated ADBE against 283 industry peers in the Software industry. ADBE gets an excellent profitability rating and is at the same time showing great financial health properties. ADBE has a correct valuation and a medium growth rate. These ratings would make ADBE suitable 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
ADBE has a better Return On Assets (22.54%) than 96.47% of its industry peers.
The Return On Equity of ADBE (51.55%) is better than 96.11% of its industry peers.
With an excellent Return On Invested Capital value of 30.78%, ADBE belongs to the best of the industry, outperforming 97.53% 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 12.21%.
The last Return On Invested Capital (30.78%) for ADBE is above the 3 year average (27.26%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 30.63%, ADBE belongs to the top of the industry, outperforming 93.99% of the companies in the same industry.
ADBE's Profit Margin has been stable in the last couple of years.
ADBE has a better Operating Margin (36.29%) than 96.47% of its industry peers.
ADBE's Operating Margin has improved in the last couple of years.
ADBE's Gross Margin of 89.15% is amongst the best of the industry. ADBE outperforms 96.82% 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ADBE is creating value.
The number of shares outstanding for ADBE has been reduced compared to 1 year ago.
The number of shares outstanding for ADBE has been reduced compared to 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 9.90. This indicates that ADBE is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 9.90, ADBE belongs to the top of the industry, outperforming 84.45% of the companies in the same industry.
The Debt to FCF ratio of ADBE is 0.67, which is an excellent value as it means it would take ADBE, only 0.67 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ADBE (0.67) is better than 75.97% of its industry peers.
A Debt/Equity ratio of 0.47 indicates that ADBE is not too dependend on debt financing.
ADBE's Debt to Equity ratio of 0.47 is on the low side compared to the rest of the industry. ADBE is outperformed by 64.66% 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 | 0.47 | ||
| Debt/FCF | 0.67 | ||
| Altman-Z | 9.9 |
ROIC/WACC2.84
WACC10.83%
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.
Looking at the Current ratio, with a value of 1.18, ADBE is doing worse than 64.31% of the companies in the same industry.
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.
The Quick ratio of ADBE (1.18) is worse than 64.31% 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 | 1.18 | ||
| 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.
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 10.54% in the past year. This is quite good.
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
Based on estimates for the next years, ADBE will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.51% on average per year.
ADBE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.39% yearly.
EPS Next Y12.75%
EPS Next 2Y12.52%
EPS Next 3Y12.52%
EPS Next 5Y11.51%
Revenue Next Year9.32%
Revenue Next 2Y9.51%
Revenue Next 3Y9.66%
Revenue Next 5Y9.39%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 21.96, the valuation of ADBE can be described as rather expensive.
Based on the Price/Earnings ratio, ADBE is valued a bit cheaper than 75.97% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.60. ADBE is around the same levels.
The Price/Forward Earnings ratio is 17.91, which indicates a rather expensive current valuation of ADBE.
Based on the Price/Forward Earnings ratio, ADBE is valued a bit cheaper than the industry average as 79.15% of the companies are valued more expensively.
ADBE's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.96 | ||
| Fwd PE | 17.91 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ADBE is valued cheaply inside the industry as 81.98% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ADBE is valued cheaper than 82.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.36 | ||
| EV/EBITDA | 19.87 |
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 12.52% in the coming years.
PEG (NY)1.72
PEG (5Y)1.17
EPS Next 2Y12.52%
EPS Next 3Y12.52%
5. Dividend
5.1 Amount
No dividends for ADBE!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
417.61
-3.07 (-0.73%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners85.27%
Inst Owner Change-0.32%
Ins Owners0.16%
Ins Owner Change3.88%
Market Cap177.99B
Analysts80
Price Target508.84 (21.85%)
Short Float %2.21%
Short Ratio2.3
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)-5.75%
PT rev (3m)-13.99%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)-0.68%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)-0.22%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)-0.1%
Revenue NY rev (1m)-0.16%
Revenue NY rev (3m)-0.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.96 | ||
| Fwd PE | 17.91 | ||
| P/S | 8.08 | ||
| P/FCF | 19.36 | ||
| P/OCF | 19.01 | ||
| P/B | 13.59 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.87 |
EPS(TTM)19.02
EY4.55%
EPS(NY)23.32
Fwd EY5.58%
FCF(TTM)21.57
FCFY5.16%
OCF(TTM)21.97
OCFY5.26%
SpS51.71
BVpS30.73
TBVpS-0.91
PEG (NY)1.72
PEG (5Y)1.17
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 | 9.9 |
F-Score8
WACC10.83%
ROIC/WACC2.84
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 Y12.75%
EPS Next 2Y12.52%
EPS Next 3Y12.52%
EPS Next 5Y11.51%
Revenue 1Y (TTM)10.54%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%10.27%
Revenue Next Year9.32%
Revenue Next 2Y9.51%
Revenue Next 3Y9.66%
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%