ADOBE INC (ADBE) Stock Fundamental Analysis
USA - NASDAQ:ADBE - US00724F1012 - Common Stock
348.31 USD
-1.83 (-0.52%)
348.5 USD
+0.19 (+0.05%)
We assign a fundamental rating of 7 out of 10 to ADBE. ADBE was compared to 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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination. 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.
ADBE had a positive operating cash flow in the past year.
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 24.19%, ADBE belongs to the best of the industry, outperforming 96.44% of the companies in the same industry.
ADBE has a better Return On Equity (59.11%) than 96.44% of its industry peers.
ADBE's Return On Invested Capital of 34.45% is amongst the best of the industry. ADBE outperforms 97.86% 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 11.98%.
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's Profit Margin of 30.01% is amongst the best of the industry. ADBE outperforms 90.75% of its industry peers.
ADBE's Profit Margin has been stable in the last couple of years.
ADBE's Operating Margin of 36.25% is amongst the best of the industry. ADBE outperforms 94.66% of its industry peers.
In the last couple of years the Operating Margin of ADBE has grown nicely.
ADBE has a better Gross Margin (89.14%) than 95.37% 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 | 36.25% | ||
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ADBE is creating value.
ADBE has less shares outstanding than it did 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
An Altman-Z score of 9.07 indicates that ADBE is not in any danger for bankruptcy at the moment.
The Altman-Z score of ADBE (9.07) is better than 82.56% of its industry peers.
The Debt to FCF ratio of ADBE is 0.65, which is an excellent value as it means it would take ADBE, only 0.65 years of fcf income to pay off all of its debts.
ADBE has a better Debt to FCF ratio (0.65) than 78.29% of its industry peers.
ADBE has a Debt/Equity ratio of 0.53. This is a neutral value indicating ADBE is somewhat dependend on debt financing.
The Debt to Equity ratio of ADBE (0.53) is worse than 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 | 9.07 |
ROIC/WACC3.08
WACC11.18%
2.3 Liquidity
ADBE has a Current Ratio of 1.02. This is a normal value and indicates that ADBE is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.02, ADBE is not doing good in the industry: 72.24% of the companies in the same industry are doing better.
ADBE has a Quick Ratio of 1.02. This is a normal value and indicates that ADBE is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.02, ADBE is not doing good in the industry: 71.17% of the companies in the same industry are doing better.
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
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.
The Revenue has grown by 10.67% in the past year. This is quite good.
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
Based on estimates for the next years, ADBE will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.15% on average per year.
ADBE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.91% yearly.
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
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
With a Price/Earnings ratio of 17.19, ADBE is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of ADBE indicates a rather cheap valuation: ADBE is cheaper than 81.85% of the companies listed in the same industry.
ADBE's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.76.
With a Price/Forward Earnings ratio of 14.58, ADBE is valued correctly.
ADBE's Price/Forward Earnings ratio is rather cheap when compared to the industry. ADBE is cheaper than 84.34% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ADBE to the average of the S&P500 Index (23.21), we can say ADBE is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.19 | ||
| Fwd PE | 14.58 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ADBE is valued cheaply inside the industry as 85.41% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ADBE indicates a rather cheap valuation: ADBE is cheaper than 88.61% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.19 | ||
| EV/EBITDA | 15.76 |
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)0.92
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 |
348.31
-1.83 (-0.52%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners86.03%
Inst Owner Change0%
Ins Owners0.16%
Ins Owner Change1.98%
Market Cap145.80B
Analysts78.72
Price Target473.01 (35.8%)
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)-6.09%
PT rev (3m)-7.13%
EPS NQ rev (1m)1.05%
EPS NQ rev (3m)1.06%
EPS NY rev (1m)0.91%
EPS NY rev (3m)1.01%
Revenue NQ rev (1m)0.47%
Revenue NQ rev (3m)0.47%
Revenue NY rev (1m)0.49%
Revenue NY rev (3m)0.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.19 | ||
| Fwd PE | 14.58 | ||
| P/S | 6.29 | ||
| P/FCF | 15.19 | ||
| P/OCF | 14.89 | ||
| P/B | 12.39 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.76 |
EPS(TTM)20.26
EY5.82%
EPS(NY)23.88
Fwd EY6.86%
FCF(TTM)22.93
FCFY6.58%
OCF(TTM)23.39
OCFY6.72%
SpS55.38
BVpS28.12
TBVpS-3.93
PEG (NY)1.12
PEG (5Y)0.92
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 | 9.07 |
F-Score7
WACC11.18%
ROIC/WACC3.08
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%