ADOBE INC (ADBE)
US00724F1012 - Common Stock
We assign a fundamental rating of 7 out of 10 to ADBE. ADBE was compared to 276 industry peers in the Software industry. ADBE gets an excellent profitability rating and is at the same time showing great financial health properties. ADBE has a decent growth rate and is not valued too expensively. These ratings would make ADBE suitable for 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.
Each year in the past 5 years ADBE had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ADBE (16.70%) is better than 96.72% of its industry peers.
ADBE has a better Return On Equity (31.05%) than 94.89% of its industry peers.
ADBE has a better Return On Invested Capital (28.84%) 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 10.10%.
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
With an excellent Profit Margin value of 24.08%, ADBE belongs to the best of the industry, outperforming 93.43% of the companies in the same industry.
In the last couple of years the Profit Margin of ADBE has remained more or less at the same level.
ADBE's Operating Margin of 34.97% is amongst the best of the industry. ADBE outperforms 97.45% of its industry peers.
ADBE's Operating Margin has improved in the last couple of years.
ADBE's Gross Margin of 88.08% is amongst the best of the industry. ADBE outperforms 94.89% 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 | 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 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.
ADBE has a better debt/assets ratio than last year.
2.2 Solvency
ADBE has an Altman-Z score of 12.73. This indicates that ADBE is financially healthy and has little risk of bankruptcy at the moment.
ADBE has a better Altman-Z score (12.73) than 91.61% of its industry peers.
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.
The Debt to FCF ratio of ADBE (0.56) is better than 79.93% of its industry peers.
ADBE has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of ADBE (0.14) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.14 | ||
| Debt/FCF | 0.56 | ||
| Altman-Z | 12.73 |
ROIC/WACC2.89
WACC9.99%
2.3 Liquidity
ADBE has a Current Ratio of 1.05. This is a normal value and indicates that ADBE is financially healthy and should not expect problems in meeting its short term obligations.
ADBE's Current ratio of 1.05 is on the low side compared to the rest of the industry. ADBE is outperformed by 75.55% of its industry peers.
ADBE has a Quick Ratio of 1.05. This is a normal value and indicates that ADBE is financially healthy and should not expect problems in meeting its short term obligations.
ADBE has a Quick ratio of 1.05. This is in the lower half of the industry: ADBE underperforms 74.45% 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 | 1.05 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 18.37% over the past year.
ADBE shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.63% yearly.
The Revenue has grown by 10.76% in the past year. This is quite good.
The Revenue has been growing by 16.54% on average over the past years. This is quite good.
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
The Earnings Per Share is expected to grow by 14.03% on average over the next years. This is quite good.
ADBE is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.90% yearly.
EPS Next Y14.45%
EPS Next 2Y13.71%
EPS Next 3Y14.1%
EPS Next 5Y14.03%
Revenue Next Year10.76%
Revenue Next 2Y11.14%
Revenue Next 3Y11.32%
Revenue Next 5Y11.9%
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
ADBE is valuated quite expensively with a Price/Earnings ratio of 28.51.
Based on the Price/Earnings ratio, ADBE is valued a bit cheaper than the industry average as 78.47% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 24.92. ADBE is around the same levels.
The Price/Forward Earnings ratio is 22.98, which indicates a rather expensive current valuation of ADBE.
Based on the Price/Forward Earnings ratio, ADBE is valued a bit cheaper than the industry average as 79.56% of the companies are valued more expensively.
ADBE is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.49, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.51 | ||
| Fwd PE | 22.98 |
4.2 Price Multiples
79.93% of the companies in the same industry are more expensive than ADBE, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ADBE indicates a somewhat cheap valuation: ADBE is cheaper than 73.72% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.98 | ||
| EV/EBITDA | 26.57 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ADBE does not grow enough to justify the current Price/Earnings ratio.
ADBE has an outstanding profitability rating, which may justify a higher PE ratio.
ADBE's earnings are expected to grow with 14.10% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.97
PEG (5Y)1.53
EPS Next 2Y13.71%
EPS Next 3Y14.1%
5. Dividend
5.1 Amount
No dividends for ADBE!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
ADOBE INC
NASDAQ:ADBE (4/26/2024, 7:00:00 PM)
After market: 477.64 +0.08 (+0.02%)477.56
+4.12 (+0.87%)
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 Cap213.95B
Analysts
Price Target
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 | 28.51 | ||
| Fwd PE | 22.98 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
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FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.97
PEG (5Y)1.53
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
EBIT Next Year
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