Adobe Inc
Exchange: NASDAQSector: TechnologyIndustry: Software - Infrastructure
Adobe Systems Incorporated (Adobe) is a diversified software company. The Company offers a line of software and services used by professionals, marketers, knowledge workers, application developers, enterprises and consumers for creating, managing, delivering, measuring and engaging with content and experiences across multiple operating systems, devices and media. The Company markets and licenses its software directly to enterprise customers through its sales force and to end users through application stores and its Website at www.adobe.com. Adobe also distributes its products through a network of distributors, value-added resellers (VARs), systems integrators, independent software vendors (ISVs), retailers and original equipment manufacturers (OEMs). In May 2013, Adobe Systems Inc acquired Ideacodes LLC. In July 2013, Adobe Systems Inc announced the completion of acquisition of privately held Neolane.
Did you know?
Trading 200% below its estimated fair value of $729.68.
Current Price
$242.92
+0.64%GoodMoat Value
$729.68
200.4% undervaluedProfile
Valuation (TTM)
Market Cap$99.60B
P/E13.82
EV$103.72B
P/B8.57
Shares Out410.00M
P/Sales4.07
Revenue$24.45B
EV/EBITDA9.92
Adobe Inc (ADBE) Stock Analysis
GoodMoat Analysis
Adobe is a high-quality software giant with a strong competitive moat, but its current valuation appears deeply undervalued according to the provided target price. The business demonstrates exceptional profitability and cash generation. This significant discrepancy between price and estimated value makes it a compelling candidate for further investigation.
Read full analysis
Adobe Inc. is a leading provider of creative, marketing, and document management software, best known for its flagship Creative Cloud suite. Applying the GoodMoat framework, the company exhibits a strong moat, likely scoring high on criteria such as high switching costs (its tools are deeply embedded in professional workflows), a powerful brand, and proprietary data ecosystems. Its financial quality is robust, with an ROE of 62.0% and an operating margin of 36.6%, far exceeding typical high-quality thresholds. The 10.1% free cash flow yield indicates strong cash generation. The key finding is the valuation assessment. At a price of $237.25, the stock trades at a P/E of 13.5x, which appears low for a company of this quality. The provided GoodMoat target of $729.68 suggests a margin of safety of over 200%, which would place it in the 'Deeply Undervalued' band (>40%) per the framework's DCF analysis guidelines. This massive gap triggers the need for a detailed, independent valuation check. According to the Decision Framework, a business with a high moat score and strong quality indicators that also shows a deep valuation discount passes the initial gates and warrants a favourable, in-depth review. The primary task for an investor is to scrutinize the assumptions behind the $729.68 target to validate the implied margin of safety. Analysis based on data as of 2024-05-15.
Market Cap$99.60B
Current Price$242.92
P/E Ratio13.82
Forward P/E—
PEG Ratio1.27
EPS$16.70
Book Value$28.35
P/B Ratio8.57
ADBE Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use 16.1% FCF growth (CAGR)
Cash vs Debt
Net Debt: 1.2B
Revenue
11.2B
FY19
12.9B
FY20
15.8B
FY21
17.6B
FY22
19.4B
FY23
21.5B
FY24
23.8B
FY25
Net Income
3.0B
FY19
5.3B
FY20
4.8B
FY21
4.8B
FY22
5.4B
FY23
5.6B
FY24
7.1B
FY25
ADBE 52-Week Range
$234.84
$420.68
50-Day MA: $264.86200-Day MA: $327.76
Did you know?
Earnings per share grew at a 16.1% CAGR.
Adobe Inc (ADBE) Financial Summary
Adobe Inc (ADBE) is a Technology company in the Software - Infrastructure industry, listed on NASDAQ. The stock currently trades at $242.92 with a market capitalization of $99.60B.
Key valuation metrics include a P/E ratio of 13.82, price-to-book ratio of 8.57, and EPS of $16.70. The company reports a profit margin of 29.5% and return on equity of 62.0%.
ADBE Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $99.60B |
| P/E Ratio | 13.82 |
| EPS | $16.70 |
| P/B Ratio | 8.57 |
| P/S Ratio | 4.07 |
| EV/EBITDA | 9.92 |
| Profit Margin | 29.5% |
| Return on Equity | 62.0% |
| Debt/Equity | 0.57 |
ADBE Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY19 | $11.17B | $2.95B |
| FY20 | $12.87B | $5.26B |
| FY21 | $15.79B | $4.82B |
| FY22 | $17.61B | $4.76B |
| FY23 | $19.41B | $5.43B |
| FY24 | $21.50B | $5.56B |
| FY25 | $23.77B | $7.13B |
Adobe Inc (ADBE) Valuation
Based on GoodMoat's DCF model, Adobe Inc has a fair value estimate of $729.68. At the current price of $242.92, the stock appears 66.7% undervalued relative to our intrinsic value estimate.
ADBE Quality Indicators
Adobe Inc maintains a profit margin of 29.5% and an operating margin of 36.6%. Return on equity stands at 62.0%. The current ratio is 1.00. Debt-to-equity ratio is 0.57.
About Adobe Inc
Adobe Systems Incorporated (Adobe) is a diversified software company. The Company offers a line of software and services used by professionals, marketers, knowledge workers, application developers, enterprises and consumers for creating, managing, delivering, measuring and engaging with content and experiences across multiple operating systems, devices and media. The Company markets and licenses its software directly to enterprise customers through its sales force and to end users through application stores and its Website at www.adobe.com. Adobe also distributes its products through a network of distributors, value-added resellers (VARs), systems integrators, independent software vendors (ISVs), retailers and original equipment manufacturers (OEMs). In May 2013, Adobe Systems Inc acquired Ideacodes LLC. In July 2013, Adobe Systems Inc announced the completion of acquisition of privately held Neolane.
ADBE Free Cash Flow
Adobe Inc generated $9.85B in trailing twelve-month free cash flow, representing an FCF yield of 9.89%. This strong FCF yield suggests the company generates substantial cash relative to its market value.
ADBE Shares Outstanding
Adobe Inc has 0.41 billion shares outstanding at a share price of $242.92, giving it a market capitalization of $99.60B.
ADBE Recent Insider Trades
Recent insider transactions at Adobe Inc include:
| Insider | Type | Shares | Value |
|---|---|---|---|
| Durn Daniel (EVP & CFO) | SELL | 1,646 | $485323.26 |