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 282 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 is valued quite cheap, while showing a decent growth score. This is a good combination! 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.
ADBE had positive earnings in each of the past 5 years.
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 24.44%, ADBE belongs to the best of the industry, outperforming 96.45% of the companies in the same industry.
With an excellent Return On Equity value of 60.00%, ADBE belongs to the best of the industry, outperforming 96.81% of the companies in the same industry.
The Return On Invested Capital of ADBE (34.50%) is better than 97.52% of its industry peers.
ADBE had an Average Return On Invested Capital over the past 3 years of 27.26%. This is significantly above the industry average of 12.26%.
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 94.33% 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 (36.37%) than 96.45% 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 96.81% 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
Compared to 5 years ago, ADBE has less shares outstanding
Compared to 1 year ago, ADBE has a worse debt to assets ratio.
2.2 Solvency
ADBE has an Altman-Z score of 9.86. This indicates that ADBE is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ADBE (9.86) is better than 83.69% 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.
ADBE has a better Debt to FCF ratio (0.65) than 77.31% of its industry peers.
ADBE has a Debt/Equity ratio of 0.54. This is a neutral value indicating ADBE is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.54, ADBE is not doing good in the industry: 65.60% of the companies in the same industry are doing better.
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 | 9.86 |
ROIC/WACC3.95
WACC8.73%
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.
ADBE has a Current ratio of 0.99. This is in the lower half of the industry: ADBE underperforms 74.82% of its industry peers.
A Quick Ratio of 0.99 indicates that ADBE may have some problems paying its short term obligations.
ADBE has a worse Quick ratio (0.99) than 73.76% 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
The Earnings Per Share has grown by an nice 13.16% over the past year.
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.
ADBE shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.63%.
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)13.16%
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
Based on estimates for the next years, ADBE will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.03% on average per year.
ADBE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.28% yearly.
EPS Next Y14.24%
EPS Next 2Y13.33%
EPS Next 3Y13.28%
EPS Next 5Y11.03%
Revenue Next Year9.89%
Revenue Next 2Y9.67%
Revenue Next 3Y9.65%
Revenue Next 5Y9.28%
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.
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
With a Price/Earnings ratio of 19.23, ADBE is valued on the expensive side.
ADBE's Price/Earnings ratio is rather cheap when compared to the industry. ADBE is cheaper than 80.85% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.21, ADBE is valued a bit cheaper.
With a Price/Forward Earnings ratio of 15.93, ADBE is valued correctly.
84.04% of the companies in the same industry are more expensive than ADBE, based on the Price/Forward Earnings ratio.
ADBE's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.70.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.23 | ||
| Fwd PE | 15.93 |
4.2 Price Multiples
ADBE's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ADBE is cheaper than 82.27% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ADBE is valued cheaper than 85.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.02 | ||
| EV/EBITDA | 19.09 |
4.3 Compensation for Growth
ADBE's 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.
A more expensive valuation may be justified as ADBE's earnings are expected to grow with 13.28% in the coming years.
PEG (NY)1.35
PEG (5Y)1.03
EPS Next 2Y13.33%
EPS Next 3Y13.28%
5. Dividend
5.1 Amount
ADBE does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:ADBE (7/2/2025, 3:02:09 PM)
376.96
-15.14 (-3.86%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners86.09%
Inst Owner Change-0.23%
Ins Owners0.16%
Ins Owner Change3.92%
Market Cap160.66B
Analysts80
Price Target509.34 (35.12%)
Short Float %1.76%
Short Ratio2.1
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)0.1%
PT rev (3m)-7.27%
EPS NQ rev (1m)-0.15%
EPS NQ rev (3m)-0.18%
EPS NY rev (1m)1.32%
EPS NY rev (3m)1.18%
Revenue NQ rev (1m)-0.18%
Revenue NQ rev (3m)-0.22%
Revenue NY rev (1m)0.53%
Revenue NY rev (3m)0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.23 | ||
| Fwd PE | 15.93 | ||
| P/S | 7.11 | ||
| P/FCF | 17.02 | ||
| P/OCF | 16.71 | ||
| P/B | 14.03 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.09 |
EPS(TTM)19.6
EY5.2%
EPS(NY)23.66
Fwd EY6.28%
FCF(TTM)22.14
FCFY5.87%
OCF(TTM)22.56
OCFY5.98%
SpS53.03
BVpS26.86
TBVpS-4.72
PEG (NY)1.35
PEG (5Y)1.03
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 24.44% | ||
| ROE | 60% | ||
| ROCE | 43.11% | ||
| ROIC | 34.5% | ||
| ROICexc | 34.5% | ||
| ROICexgc | 117.34% | ||
| 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 | 250 | ||
| Cash Conversion | 105.92% | ||
| Profit Quality | 137.39% | ||
| Current Ratio | 0.99 | ||
| Quick Ratio | 0.99 | ||
| Altman-Z | 9.86 |
F-Score7
WACC8.73%
ROIC/WACC3.95
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 Y14.24%
EPS Next 2Y13.33%
EPS Next 3Y13.28%
EPS Next 5Y11.03%
Revenue 1Y (TTM)10.63%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%10.62%
Revenue Next Year9.89%
Revenue Next 2Y9.67%
Revenue Next 3Y9.65%
Revenue Next 5Y9.28%
EBIT growth 1Y13.68%
EBIT growth 3Y10.09%
EBIT growth 5Y17.62%
EBIT Next Year16.09%
EBIT Next 3Y11.14%
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%