ADOBE INC (ADBE) Stock Fundamental Analysis
USA - NASDAQ:ADBE - US00724F1012 - Common Stock
350.31 USD
-3.78 (-1.07%)
We assign a fundamental rating of 7 out of 10 to ADBE. ADBE was compared to 285 industry peers in the Software industry. ADBE gets an excellent profitability rating and is at the same time showing great financial health properties. 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
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.
ADBE had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 24.19%, ADBE belongs to the best of the industry, outperforming 96.49% of the companies in the same industry.
With an excellent Return On Equity value of 59.11%, ADBE belongs to the best of the industry, outperforming 96.49% of the companies in the same industry.
The Return On Invested Capital of ADBE (34.45%) is better than 97.89% 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 11.90%.
The 3 year average ROIC (27.26%) for ADBE is below the current ROIC(34.45%), indicating increased profibility in the last year.
| 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 has a better Profit Margin (30.01%) than 90.88% 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 94.74% of the companies in the same industry.
ADBE's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 89.14%, ADBE belongs to the top of the industry, outperforming 95.79% 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.
ADBE has less shares outstanding than it did 5 years ago.
ADBE has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 9.13 indicates that ADBE is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 9.13, ADBE belongs to the best of the industry, outperforming 84.21% of the companies in the same industry.
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.
The Debt to FCF ratio of ADBE (0.65) is better than 78.25% of its industry peers.
A Debt/Equity ratio of 0.53 indicates that ADBE is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.53, ADBE is not doing good in the industry: 66.67% 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 | 0.53 | ||
| Debt/FCF | 0.65 | ||
| Altman-Z | 9.13 |
ROIC/WACC3.17
WACC10.88%
2.3 Liquidity
A Current Ratio of 1.02 indicates that ADBE should not have too much problems paying its short term obligations.
The Current ratio of ADBE (1.02) is worse than 71.93% of its industry peers.
A Quick Ratio of 1.02 indicates that ADBE should not have too much problems paying its short term obligations.
The Quick ratio of ADBE (1.02) is worse than 70.88% 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 | 1.02 | ||
| Quick Ratio | 1.02 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.31% over the past year.
The Earnings Per Share has been growing by 18.69% on average over the past years. This is quite good.
ADBE shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.67%.
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 10.15% yearly.
Based on estimates for the next years, ADBE will show a quite strong growth in Revenue. The Revenue will grow by 8.91% on average per year.
EPS Next Y15.4%
EPS Next 2Y13.87%
EPS Next 3Y13.55%
EPS Next 5Y10.15%
Revenue Next Year10.47%
Revenue Next 2Y9.87%
Revenue Next 3Y9.66%
Revenue Next 5Y8.91%
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.
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
The Price/Earnings ratio is 17.29, which indicates a rather expensive current valuation of ADBE.
Based on the Price/Earnings ratio, ADBE is valued cheaply inside the industry as 81.40% of the companies are valued more expensively.
ADBE is valuated rather cheaply when we compare the Price/Earnings ratio to 27.57, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 14.67, the valuation of ADBE can be described as correct.
Based on the Price/Forward Earnings ratio, ADBE is valued cheaper than 83.51% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ADBE to the average of the S&P500 Index (23.09), we can say ADBE is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.29 | ||
| Fwd PE | 14.67 |
4.2 Price Multiples
84.91% of the companies in the same industry are more expensive than ADBE, based on the Enterprise Value to EBITDA ratio.
87.37% of the companies in the same industry are more expensive than ADBE, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.28 | ||
| EV/EBITDA | 15.94 |
4.3 Compensation for Growth
The 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.
ADBE's earnings are expected to grow with 13.55% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.12
PEG (5Y)0.93
EPS Next 2Y13.87%
EPS Next 3Y13.55%
5. Dividend
5.1 Amount
ADBE does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:ADBE (10/23/2025, 9:46:06 AM)
350.31
-3.78 (-1.07%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners86.03%
Inst Owner Change-0.65%
Ins Owners0.16%
Ins Owner Change1.97%
Market Cap146.64B
Revenue(TTM)23.18B
Net Income(TTM)6.96B
Analysts78.72
Price Target473.01 (35.03%)
Short Float %2.27%
Short Ratio2.21
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)-1.31%
PT rev (3m)-7.13%
EPS NQ rev (1m)0.07%
EPS NQ rev (3m)1.06%
EPS NY rev (1m)0.91%
EPS NY rev (3m)0.92%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.47%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)0.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.29 | ||
| Fwd PE | 14.67 | ||
| P/S | 6.33 | ||
| P/FCF | 15.28 | ||
| P/OCF | 14.98 | ||
| P/B | 12.46 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.94 |
EPS(TTM)20.26
EY5.78%
EPS(NY)23.88
Fwd EY6.82%
FCF(TTM)22.93
FCFY6.55%
OCF(TTM)23.39
OCFY6.68%
SpS55.38
BVpS28.12
TBVpS-3.93
PEG (NY)1.12
PEG (5Y)0.93
Graham Number113.21
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%
ROICexgc growth 3YN/A
ROICexgc 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 | 9.13 |
F-Score7
WACC10.88%
ROIC/WACC3.17
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 5Y10.15%
Revenue 1Y (TTM)10.67%
Revenue growth 3Y10.86%
Revenue growth 5Y14%
Sales Q2Q%10.72%
Revenue Next Year10.47%
Revenue Next 2Y9.87%
Revenue Next 3Y9.66%
Revenue Next 5Y8.91%
EBIT growth 1Y11.62%
EBIT growth 3Y10.09%
EBIT growth 5Y17.62%
EBIT Next Year17.42%
EBIT Next 3Y11.33%
EBIT Next 5Y10.2%
FCF growth 1Y25.87%
FCF growth 3Y4.59%
FCF growth 5Y14.35%
OCF growth 1Y21.94%
OCF growth 3Y3.67%
OCF growth 5Y12.75%