ADOBE INC (ADBE)
US00724F1012 - Common Stock
Taking everything into account, ADBE scores 7 out of 10 in our fundamental rating. ADBE was compared to 276 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 has a correct valuation and a medium growth rate. With these ratings, ADBE could be worth investigating further for 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.
Each year in the past 5 years ADBE has been profitable.
In the past 5 years ADBE always reported a positive cash flow from operatings.
1.2 Ratios
ADBE's Return On Assets of 16.70% is amongst the best of the industry. ADBE outperforms 96.35% of its industry peers.
ADBE's Return On Equity of 31.05% is amongst the best of the industry. ADBE outperforms 94.89% of its industry peers.
The Return On Invested Capital of ADBE (28.84%) is better than 98.54% 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 10.35%.
The last Return On Invested Capital (28.84%) for ADBE is above the 3 year average (25.17%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.7% | ||
| ROE | 31.05% | ||
| ROIC | 28.84% |
ROA(3y)17.81%
ROA(5y)17.86%
ROE(3y)33.1%
ROE(5y)33.4%
ROIC(3y)25.17%
ROIC(5y)23.19%
1.3 Margins
ADBE has a better Profit Margin (24.08%) than 93.43% of its industry peers.
ADBE's Profit Margin has been stable in the last couple of years.
With an excellent Operating Margin value of 34.97%, ADBE belongs to the best of the industry, outperforming 97.45% of the companies in the same industry.
ADBE's Operating Margin has improved in the last couple of years.
ADBE has a Gross Margin of 88.08%. This is amongst the best in the industry. ADBE outperforms 94.89% of its industry peers.
ADBE's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.97% | ||
| PM (TTM) | 24.08% | ||
| GM | 88.08% |
OM growth 3Y1.15%
OM growth 5Y2.49%
PM growth 3Y-11.88%
PM growth 5Y-0.51%
GM growth 3Y0.48%
GM growth 5Y0.25%
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.
The number of shares outstanding for ADBE has been reduced compared to 1 year ago.
Compared to 5 years ago, ADBE has less shares outstanding
Compared to 1 year ago, ADBE has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 12.65 indicates that ADBE is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 12.65, ADBE belongs to the best of the industry, outperforming 92.34% of the companies in the same industry.
ADBE has a debt to FCF ratio of 0.56. This is a very positive value and a sign of high solvency as it would only need 0.56 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.56, ADBE is in the better half of the industry, outperforming 79.93% of the companies in the same industry.
ADBE has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.14, ADBE is in line with its industry, outperforming 51.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.56 | ||
| Altman-Z | 12.65 |
ROIC/WACC2.92
WACC9.87%
2.3 Liquidity
A Current Ratio of 1.05 indicates that ADBE should not have too much problems paying its short term obligations.
With a Current ratio value of 1.05, ADBE is not doing good in the industry: 75.55% of the companies in the same industry are doing better.
A Quick Ratio of 1.05 indicates that ADBE should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.05, ADBE is not doing good in the industry: 74.45% of the companies in the same industry are doing better.
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 | 1.05 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
ADBE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.37%, which is quite good.
The Earnings Per Share has been growing by 18.63% on average over the past years. This is quite good.
The Revenue has grown by 10.76% in the past year. This is quite good.
Measured over the past years, ADBE shows a quite strong growth in Revenue. The Revenue has been growing by 16.54% on average per year.
EPS 1Y (TTM)18.37%
EPS 3Y17.01%
EPS 5Y18.63%
EPS growth Q2Q17.89%
Revenue 1Y (TTM)10.76%
Revenue growth 3Y14.68%
Revenue growth 5Y16.54%
Revenue growth Q2Q11.32%
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 13.32% on average per year.
The Revenue is expected to grow by 10.99% on average over the next years. This is quite good.
EPS Next Y14.45%
EPS Next 2Y13.71%
EPS Next 3Y14.1%
EPS Next 5Y13.32%
Revenue Next Year10.76%
Revenue Next 2Y11.14%
Revenue Next 3Y11.32%
Revenue Next 5Y10.99%
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 estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 28.02 indicates a quite expensive valuation of ADBE.
Based on the Price/Earnings ratio, ADBE is valued a bit cheaper than the industry average as 78.10% of the companies are valued more expensively.
ADBE's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.55.
Based on the Price/Forward Earnings ratio of 22.59, the valuation of ADBE can be described as rather expensive.
ADBE's Price/Forward Earnings ratio is rather cheap when compared to the industry. ADBE is cheaper than 80.29% of the companies in the same industry.
ADBE's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 20.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.02 | ||
| Fwd PE | 22.59 |
4.2 Price Multiples
ADBE's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ADBE is cheaper than 79.93% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ADBE indicates a somewhat cheap valuation: ADBE is cheaper than 74.09% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.42 | ||
| EV/EBITDA | 26.33 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive 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 14.10% in the coming years.
PEG (NY)1.94
PEG (5Y)1.5
EPS Next 2Y13.71%
EPS Next 3Y14.1%
5. Dividend
5.1 Amount
ADBE does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
ADOBE INC
NASDAQ:ADBE (5/1/2024, 7:00:00 PM)
Premarket: 473.6 +4.21 (+0.9%)469.39
+6.56 (+1.42%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap210.29B
Analysts
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Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
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Surprises & Revisions
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.02 | ||
| Fwd PE | 22.59 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
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EPS(NY)
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FCF(TTM)
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OCF(TTM)
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SpS
BVpS
TBVpS
PEG (NY)1.94
PEG (5Y)1.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.7% | ||
| ROE | 31.05% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 34.97% | ||
| PM (TTM) | 24.08% | ||
| GM | 88.08% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.69
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)18.37%
EPS 3Y17.01%
EPS 5Y
EPS growth Q2Q
EPS Next Y14.45%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)10.76%
Revenue growth 3Y14.68%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
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