ADOBE INC (ADBE) Stock Fundamental Analysis
NASDAQ:ADBE - US00724F1012 - Common Stock
354.135 USD
+5.16 (+1.48%)
Overall ADBE gets a fundamental rating of 7 out of 10. We evaluated ADBE against 280 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 may be a bit undervalued, certainly considering the very reasonable score on growth These ratings would make ADBE suitable 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.
ADBE had positive earnings in each of the past 5 years.
Each year in the past 5 years ADBE had a positive operating cash flow.
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 96.07% of its industry peers.
ADBE has a better Return On Invested Capital (34.50%) 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 12.03%.
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
ADBE's Profit Margin of 30.39% is amongst the best of the industry. ADBE outperforms 91.07% of its industry peers.
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 94.64% of its industry peers.
In the last couple of years the Operating Margin of ADBE has grown nicely.
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.
Compared to 1 year ago, ADBE has less shares outstanding
The number of shares outstanding for ADBE has been reduced compared to 5 years ago.
ADBE has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 9.26 indicates that ADBE is not in any danger for bankruptcy at the moment.
ADBE has a better Altman-Z score (9.26) than 84.64% 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.
Looking at the Debt to FCF ratio, with a value of 0.65, ADBE is in the better half of the industry, outperforming 77.50% of the companies in the same industry.
ADBE has a Debt/Equity ratio of 0.54. This is a neutral value indicating 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 67.14% of its industry peers.
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 | 0.54 | ||
| Debt/FCF | 0.65 | ||
| Altman-Z | 9.26 |
ROIC/WACC3.11
WACC11.08%
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.
The Current ratio of ADBE (0.99) is worse than 72.50% of its industry peers.
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.
Looking at the Quick ratio, with a value of 0.99, ADBE is doing worse than 71.43% of the companies in the same industry.
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 13.16%, which is quite good.
Measured over the past years, ADBE shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.69% on average per year.
Looking at the last year, ADBE shows a quite strong growth in Revenue. The Revenue has grown by 10.63% in the last year.
The Revenue has been growing by 14.00% on average over the past years. This is quite good.
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
The Earnings Per Share is expected to grow by 10.04% 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 8.89% on average per year.
EPS Next Y14.35%
EPS Next 2Y13.44%
EPS Next 3Y13.25%
EPS Next 5Y10.04%
Revenue Next Year9.93%
Revenue Next 2Y9.67%
Revenue Next 3Y9.55%
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
Based on the Price/Earnings ratio of 18.07, the valuation of ADBE can be described as rather expensive.
80.00% of the companies in the same industry are more expensive than ADBE, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of ADBE to the average of the S&P500 Index (27.02), we can say ADBE is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 14.94, the valuation of ADBE can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ADBE indicates a rather cheap valuation: ADBE is cheaper than 84.64% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.66. ADBE is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.07 | ||
| Fwd PE | 14.94 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ADBE indicates a rather cheap valuation: ADBE is cheaper than 83.57% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ADBE indicates a rather cheap valuation: ADBE is cheaper than 88.57% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.92 | ||
| EV/EBITDA | 16.6 |
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.
ADBE's earnings are expected to grow with 13.25% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.26
PEG (5Y)0.97
EPS Next 2Y13.44%
EPS Next 3Y13.25%
5. Dividend
5.1 Amount
ADBE does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:ADBE (9/8/2025, 12:21:14 PM)
354.135
+5.16 (+1.48%)
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 Change2.25%
Market Cap150.22B
Analysts78.26
Price Target502.74 (41.96%)
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)-0.45%
PT rev (3m)-0.64%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.37%
EPS NY rev (1m)0.01%
EPS NY rev (3m)1.42%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.38%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.07 | ||
| Fwd PE | 14.94 | ||
| P/S | 6.65 | ||
| P/FCF | 15.92 | ||
| P/OCF | 15.62 | ||
| P/B | 13.12 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.6 |
EPS(TTM)19.6
EY5.53%
EPS(NY)23.71
Fwd EY6.69%
FCF(TTM)22.25
FCFY6.28%
OCF(TTM)22.67
OCFY6.4%
SpS53.28
BVpS26.99
TBVpS-4.75
PEG (NY)1.26
PEG (5Y)0.97
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 | 9.26 |
F-Score7
WACC11.08%
ROIC/WACC3.11
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 Y14.35%
EPS Next 2Y13.44%
EPS Next 3Y13.25%
EPS Next 5Y10.04%
Revenue 1Y (TTM)10.63%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%10.62%
Revenue Next Year9.93%
Revenue Next 2Y9.67%
Revenue Next 3Y9.55%
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%