ADOBE INC (ADBE) Stock Fundamental Analysis
NASDAQ:ADBE - Nasdaq - US00724F1012 - Common Stock - Currency: USD
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. Both the health and profitability get an excellent rating, making ADBE a very profitable company, without any liquidiy or solvency issues. ADBE scores decently on growth, while it is valued quite cheap. This could make an interesting combination. These ratings would make ADBE suitable 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.
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 (24.44%) than 96.44% of its industry peers.
With an excellent Return On Equity value of 60.00%, ADBE belongs to the best of the industry, outperforming 96.80% of the companies in the same industry.
The Return On Invested Capital of ADBE (34.50%) is better than 97.51% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ADBE is significantly above the industry average of 12.19%.
The 3 year average ROIC (27.26%) for ADBE is below the current ROIC(34.50%), indicating increased profibility in the last year.
| 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 94.31% of its industry peers.
In the last couple of years the Profit Margin of ADBE has remained more or less at the same level.
The Operating Margin of ADBE (36.37%) is better than 96.44% of its industry peers.
ADBE's Operating Margin has improved in the last couple of years.
ADBE's Gross Margin of 89.25% is amongst the best of the industry. ADBE outperforms 96.80% 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
ADBE has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for ADBE has been reduced compared to 1 year ago.
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 9.49. This indicates that ADBE is financially healthy and has little risk of bankruptcy at the moment.
ADBE has a Altman-Z score of 9.49. This is amongst the best in the industry. ADBE outperforms 82.56% 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 77.22% of the companies in the same industry.
A Debt/Equity ratio of 0.54 indicates that ADBE is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.54, ADBE is doing worse than 66.19% of the companies in the same industry.
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 | 9.49 |
ROIC/WACC3.03
WACC11.37%
2.3 Liquidity
A Current Ratio of 0.99 indicates that ADBE may have some problems paying its short term obligations.
With a Current ratio value of 0.99, ADBE is not doing good in the industry: 74.73% of the companies in the same industry are doing better.
A Quick Ratio of 0.99 indicates that ADBE may have some problems paying its short term obligations.
The Quick ratio of ADBE (0.99) is worse than 73.67% 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 | 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.
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 10.63% 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)13.16%
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
ADBE is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.03% yearly.
Based on estimates for the next years, ADBE will show a quite strong growth in Revenue. The Revenue will grow by 9.28% on average per year.
EPS Next Y14.34%
EPS Next 2Y13.45%
EPS Next 3Y13.32%
EPS Next 5Y11.03%
Revenue Next Year9.93%
Revenue Next 2Y9.69%
Revenue Next 3Y9.62%
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
Based on the Price/Earnings ratio of 18.91, the valuation of ADBE can be described as rather expensive.
Based on the Price/Earnings ratio, ADBE is valued cheaply inside the industry as 82.21% of the companies are valued more expensively.
ADBE's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.91.
The Price/Forward Earnings ratio is 15.64, which indicates a correct valuation of ADBE.
Based on the Price/Forward Earnings ratio, ADBE is valued cheaper than 85.05% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 37.11, ADBE is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.91 | ||
| Fwd PE | 15.64 |
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.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ADBE indicates a rather cheap valuation: ADBE is cheaper than 88.26% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.66 | ||
| EV/EBITDA | 17.32 |
4.3 Compensation for Growth
The 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 13.32% in the coming years.
PEG (NY)1.32
PEG (5Y)1.01
EPS Next 2Y13.45%
EPS Next 3Y13.32%
5. Dividend
5.1 Amount
ADBE does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
370.7
+1.23 (+0.33%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners86.09%
Inst Owner Change0.04%
Ins Owners0.16%
Ins Owner Change2.33%
Market Cap157.25B
Analysts80
Price Target505.01 (36.23%)
Short Float %2.45%
Short Ratio2.8
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)-0.85%
PT rev (3m)-2.18%
EPS NQ rev (1m)1.52%
EPS NQ rev (3m)1.37%
EPS NY rev (1m)0.09%
EPS NY rev (3m)1.38%
Revenue NQ rev (1m)0.57%
Revenue NQ rev (3m)0.38%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.91 | ||
| Fwd PE | 15.64 | ||
| P/S | 6.96 | ||
| P/FCF | 16.66 | ||
| P/OCF | 16.35 | ||
| P/B | 13.74 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.32 |
EPS(TTM)19.6
EY5.29%
EPS(NY)23.71
Fwd EY6.4%
FCF(TTM)22.25
FCFY6%
OCF(TTM)22.67
OCFY6.11%
SpS53.28
BVpS26.99
TBVpS-4.75
PEG (NY)1.32
PEG (5Y)1.01
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 | 9.49 |
F-Score7
WACC11.37%
ROIC/WACC3.03
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 Y14.34%
EPS Next 2Y13.45%
EPS Next 3Y13.32%
EPS Next 5Y11.03%
Revenue 1Y (TTM)10.63%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%10.62%
Revenue Next Year9.93%
Revenue Next 2Y9.69%
Revenue Next 3Y9.62%
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%