Adobe Inc.(ADBE) - Stock detail

Adobe Inc.

US
ADBE
Adobe Inc.(Listing date: 08/13/1986)

Adobe Inc. was originally incorporated in California in October 1983 and reincorporated in Delaware in May 1997. The company is one of the world's largest and most diversified software companies. It offers a range of products and services for creative professionals, marketers, knowledge workers, students, application developers, enterprises, and consumers to create, manage, deliver, measure, optimize, engage with, and process compelling content and experiences on personal computers, devices, and media.

AI Value AnalystHold
Overall Rating6.7/10
Generated at:2026-06-11 17:41:24
Analysis based on 5 financial reports from periods: 2025-08-29, 2025-05-30, 2025-02-28, 2024-11-29, and 2024-08-30. Real-time and TTM (Trailing Twelve Months) data used for valuation analysis. Stock price data includes closing price of $218.80 on 2026-06-11 and 60-day trading window range from $218.09 to $275.44.
Overview

Adobe Inc. (ADBE) is a fundamentally strong technology company with excellent profitability, high returns on capital, and consistent revenue growth. The company operates in the software application industry with a successful cloud-based subscription model. While financial health shows some concerns regarding liquidity and leverage, overall business fundamentals remain robust.

Valuation
6/10
Profitability
9/10
Financial health
5/10
Operation Advice
  • Hold recommendation for existing shareholders to await stabilization or further confirmation of business trajectory.
  • New investors might consider initiating a position cautiously at current levels around $218.80, which represents a potential market overreaction and sits near the lower end of the reasonable fair value range of $210-$250.

Valuation

P/E TTM
13.09
P/E LYR
16.79
P/B MRQ
8.25
P/S TTM
--
AI Analysis
  • Valuation appears reasonable with P/E ratio in mid-teens for a software company with strong growth and margins. The recent price decline to $218.80 brings the stock toward the lower end of a conservative fair value range, potentially indicating market overreaction.
  • P/E (TTM) is 13.09, calculated based on current price of $218.80 and TTM earnings
  • Forward P/E (Dynamic) is 16.79, suggesting market is pricing in future earnings growth
  • P/E ratio in mid-teens for a software company with ~10% revenue growth and >30% net margins can be considered reasonable
  • Price-to-Book (P/B) ratio is 8.25, reflecting market's valuation of immense intangible assets not fully captured on balance sheet
  • Price-to-Sales (P/S) ratio is 5.03 (TTM), consistent with a premium, high-margin software company
  • Stock closed at $218.80 on 2026-06-11, representing significant single-day drop of 6.25%
  • Over 60-day trading window, price ranged from high of $275.44 to low of $218.09
  • Based on TTM P/E of 13.09 and high profitability, current price appears to be in fair value range
  • Conservative fair value estimate considering growth and margins could be in range of $210 - $250
  • Recent sharp decline to ~$218.80 brings price toward lower end of reasonable range, potentially indicating market overreaction
Valuation trend

Profitability

ROE TTM
40.77%
Net margin
30.01%
Gross margin
89.18%
Total revenue
17.57B
AI Analysis
  • Adobe demonstrates exceptionally strong and improving profitability with consistent revenue growth, industry-leading gross margins, and outstanding returns on capital. Net margin has shown significant improvement reaching 30.01% in latest quarter.
  • Company shows consistent year-over-year revenue growth around 10-11% across recent quarters, indicating stable demand
  • Maintains industry-leading gross margin consistently near 89%, reflecting high-margin nature of software business
  • Net margin has shown significant improvement, reaching 30.01% in latest reported quarter (Q3 2025), up from 24.39% a year prior
  • Return on Equity (ROE) of 40.77% (TTM) is outstanding
  • Return on Assets (ROA) of 17.88% (TTM) is outstanding
  • These figures indicate highly efficient use of shareholder equity and company assets to generate profits
  • Sharp rise in net income and ROE in recent quarters is particularly notable
Profitability
2024Q32024Q42025Q12025Q22025Q3
ROE TTM--36.31%13.32%27.41%40.77%
Earnings
2024Q32024Q42025Q12025Q22025Q3
Total revenue15.90B21.50B5.71B11.59B17.57B

Financial health

Debt/Asset
59.07%
Current ratio
1.02
Quick ratio
--
Cash ratio
1.02
AI Analysis
  • Financial health shows both strength and areas of concern with tight liquidity position (current ratio 1.02) and moderate financial leverage (debt-to-asset ratio 59.07%). Company is profitable and generates strong cash flows supporting debt obligations.
  • Current ratio of 1.02 indicates company has just enough current assets to cover current liabilities
  • This is tight liquidity position, though common for asset-light software companies
  • Debt-to-asset ratio of 59.07% signifies moderate level of financial leverage
  • Moderate leverage provides potential for higher returns on equity but also increases financial risk, especially in higher interest rate environment
  • Company is profitable and generates strong cash flows, which supports its debt obligations
  • Low current ratio warrants monitoring, particularly for ability to handle short-term obligations without stress
Leverage
2024Q32024Q42025Q12025Q22025Q3
Debt/Asset51.24%53.34%56.28%59.27%59.07%
Liquidity
2024Q32024Q42025Q12025Q22025Q3
Current ratio1.111.071.180.991.02