ADOBE INC (ADBE) Stock Fundamental Analysis
USA - NASDAQ:ADBE - US00724F1012 - Common Stock
359.42 USD
-0.95 (-0.26%)
359.2 USD
-0.22 (-0.06%)
Overall ADBE gets a fundamental rating of 7 out of 10. We evaluated ADBE against 281 industry peers in the Software industry. ADBE scores excellent points on both the profitability and health parts. This is a solid base for a good stock. 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.
In the past year ADBE had a positive cash flow from operations.
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
The Return On Assets of ADBE (24.19%) is better than 96.44% of its industry peers.
ADBE has a Return On Equity of 59.11%. This is amongst the best in the industry. ADBE outperforms 96.44% of its industry peers.
The Return On Invested Capital of ADBE (34.45%) 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 11.95%.
The last Return On Invested Capital (34.45%) for ADBE is above the 3 year average (27.26%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 24.19% | ||
| ROE | 59.11% | ||
| ROIC | 34.46% |
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 30.01% is amongst the best of the industry. ADBE outperforms 91.10% of its industry peers.
ADBE's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 36.25%, ADBE belongs to the top of the industry, outperforming 94.66% of the companies in the same industry.
In the last couple of years the Operating Margin of ADBE has grown nicely.
Looking at the Gross Margin, with a value of 89.14%, ADBE belongs to the top of the industry, outperforming 95.37% of the companies in the same industry.
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 | 36.25% | ||
| PM (TTM) | 30.01% | ||
| GM | 89.14% |
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.
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 9.30. This indicates that ADBE is financially healthy and has little risk of bankruptcy at the moment.
ADBE has a better Altman-Z score (9.30) than 83.99% 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 78.29% of the companies in the same industry.
A Debt/Equity ratio of 0.53 indicates that ADBE is somewhat dependend on debt financing.
ADBE has a Debt to Equity ratio of 0.53. This is in the lower half of the industry: ADBE underperforms 66.55% 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 | 0.53 | ||
| Debt/FCF | 0.65 | ||
| Altman-Z | 9.3 |
ROIC/WACC3.05
WACC11.28%
2.3 Liquidity
A Current Ratio of 1.02 indicates that ADBE should not have too much problems paying its short term obligations.
ADBE's Current ratio of 1.02 is on the low side compared to the rest of the industry. ADBE is outperformed by 72.24% of its industry peers.
A Quick Ratio of 1.02 indicates that ADBE should not have too much problems paying its short term obligations.
ADBE's Quick ratio of 1.02 is on the low side compared to the rest of the industry. ADBE is outperformed by 71.17% 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 | 1.02 | ||
| Quick Ratio | 1.02 |
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.
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 10.67% 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)13.31%
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
ADBE is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.04% yearly.
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 Y15.4%
EPS Next 2Y13.87%
EPS Next 3Y13.55%
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.
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 17.74, the valuation of ADBE can be described as rather expensive.
80.43% 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 (27.67), we can say ADBE is valued slightly cheaper.
A Price/Forward Earnings ratio of 15.05 indicates a correct valuation of ADBE.
83.99% of the companies in the same industry are more expensive than ADBE, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.13. ADBE is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.74 | ||
| Fwd PE | 15.05 |
4.2 Price Multiples
83.99% of the companies in the same industry are more expensive than ADBE, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, ADBE is valued cheaply inside the industry as 87.90% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.88 | ||
| EV/EBITDA | 16.44 |
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 13.55% in the coming years.
PEG (NY)1.15
PEG (5Y)0.95
EPS Next 2Y13.87%
EPS Next 3Y13.55%
5. Dividend
5.1 Amount
No dividends for ADBE!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
359.42
-0.95 (-0.26%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners86.03%
Inst Owner Change-1.9%
Ins Owners0.16%
Ins Owner Change1.98%
Market Cap152.47B
Analysts78.26
Price Target479.28 (33.35%)
Short Float %2.35%
Short Ratio2.48
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)0.24%
Min EPS beat(2)-0.06%
Max EPS beat(2)0.55%
EPS beat(4)3
Avg EPS beat(4)0.45%
Min EPS beat(4)-0.06%
Max EPS beat(4)1.15%
EPS beat(8)7
Avg EPS beat(8)0.5%
EPS beat(12)11
Avg EPS beat(12)0.67%
EPS beat(16)11
Avg EPS beat(16)0.26%
Revenue beat(2)0
Avg Revenue beat(2)-0.58%
Min Revenue beat(2)-0.6%
Max Revenue beat(2)-0.56%
Revenue beat(4)0
Avg Revenue beat(4)-0.73%
Min Revenue beat(4)-0.99%
Max Revenue beat(4)-0.56%
Revenue beat(8)0
Avg Revenue beat(8)-1.08%
Revenue beat(12)0
Avg Revenue beat(12)-1.21%
Revenue beat(16)0
Avg Revenue beat(16)-1.27%
PT rev (1m)-4.84%
PT rev (3m)-5.9%
EPS NQ rev (1m)0.98%
EPS NQ rev (3m)2.81%
EPS NY rev (1m)0.91%
EPS NY rev (3m)1.01%
Revenue NQ rev (1m)0.47%
Revenue NQ rev (3m)0.66%
Revenue NY rev (1m)0.37%
Revenue NY rev (3m)0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.74 | ||
| Fwd PE | 15.05 | ||
| P/S | 6.58 | ||
| P/FCF | 15.88 | ||
| P/OCF | 15.57 | ||
| P/B | 12.95 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.44 |
EPS(TTM)20.26
EY5.64%
EPS(NY)23.88
Fwd EY6.65%
FCF(TTM)22.63
FCFY6.3%
OCF(TTM)23.08
OCFY6.42%
SpS54.65
BVpS27.75
TBVpS-3.88
PEG (NY)1.15
PEG (5Y)0.95
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 24.19% | ||
| ROE | 59.11% | ||
| ROCE | 43.05% | ||
| ROIC | 34.46% | ||
| ROICexc | 49.53% | ||
| ROICexgc | 4255.63% | ||
| OM | 36.25% | ||
| PM (TTM) | 30.01% | ||
| GM | 89.14% | ||
| FCFM | 41.41% |
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 Turnover0.81
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 0.65 | ||
| Debt/EBITDA | 0.67 | ||
| Cap/Depr | 22.65% | ||
| Cap/Sales | 0.83% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 105.81% | ||
| Profit Quality | 137.98% | ||
| Current Ratio | 1.02 | ||
| Quick Ratio | 1.02 | ||
| Altman-Z | 9.3 |
F-Score7
WACC11.28%
ROIC/WACC3.05
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 Y15.4%
EPS Next 2Y13.87%
EPS Next 3Y13.55%
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 1Y11.62%
EBIT growth 3Y10.09%
EBIT growth 5Y17.62%
EBIT Next Year17.42%
EBIT Next 3Y11.33%
EBIT Next 5Y10.02%
FCF growth 1Y25.87%
FCF growth 3Y4.59%
FCF growth 5Y14.35%
OCF growth 1Y21.94%
OCF growth 3Y3.67%
OCF growth 5Y12.75%