Adobe Inc.
Adobe Inc. Fundamental Analysis
Adobe Inc. (ADBE) shows strong financial fundamentals with a PE ratio of 15.05, profit margin of 30.00%, and ROE of 59.50%. The company generates $23.9B in annual revenue with strong year-over-year growth of 10.80%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 80.1/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze ADBE's fundamental strength across five key dimensions:
Efficiency Score
ExcellentADBE demonstrates superior asset utilization.
Valuation Score
ModerateADBE shows balanced valuation metrics.
Growth Score
ModerateADBE shows steady but slowing expansion.
Financial Health Score
ModerateADBE shows balanced financial health with some risks.
Profitability Score
ExcellentADBE achieves industry-leading margins.
Key Financial Metrics
Is ADBE Expensive or Cheap?
P/E Ratio
ADBE trades at 15.05 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, ADBE's PEG of 3.78 indicates potential overvaluation.
Price to Book
The market values Adobe Inc. at 9.24 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 10.93 times EBITDA. This signals the market has high growth expectations.
How Well Does ADBE Make Money?
Net Profit Margin
For every $100 in sales, Adobe Inc. keeps $30.00 as profit after all expenses.
Operating Margin
Core operations generate 36.63 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $59.50 in profit for every $100 of shareholder equity.
ROA
Adobe Inc. generates $24.17 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Adobe Inc. generates strong operating cash flow of $10.07B, reflecting robust business health.
Free Cash Flow
Adobe Inc. generates strong free cash flow of $9.89B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $23.63 in free cash annually.
FCF Yield
ADBE converts 9.13% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
15.05
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.78
vs 25 benchmark
P/B Ratio
Price to book value ratio
9.24
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.53
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.57
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.00
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.59
vs 25 benchmark
ROA
Return on assets percentage
0.24
vs 25 benchmark
ROCE
Return on capital employed
0.45
vs 25 benchmark
How ADBE Stacks Against Its Sector Peers
| Metric | ADBE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 15.05 | 35.19 | Better (Cheaper) |
| ROE | 59.50% | 1155.00% | Weak |
| Net Margin | 30.00% | -127067.00% (disorted) | Strong |
| Debt/Equity | 0.57 | 0.41 | Weak (High Leverage) |
| Current Ratio | 1.00 | 4.71 | Weak Liquidity |
| ROA | 24.17% | -314918.00% (disorted) | Strong |
ADBE outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Adobe Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
109.38%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
104.89%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
98.18%
Industry Style: Growth, Innovation, High Beta
High Growth