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 AnalystBuy
Overall Rating7.7/10
Generated at:2026-06-03 17:40:36
Analysis based on 5 financial reports from periods: 2025-08-29, 2025-05-30, 2025-02-28, 2024-11-29, and 2024-08-30. Current price data as of 2026-06-03 close. TTM (Trailing Twelve Months) metrics used where applicable. Data includes 60-day trading range from 2026-04-10 to 2026-03-10.
Overview

Adobe Inc. (ADBE) is a leading global technology company with a successful subscription-based SaaS model. The analysis reveals a mixed financial picture with outstanding profitability but some liquidity concerns, while valuation appears compelling relative to the company's high-quality business model and growth trajectory.

Valuation
8/10
Profitability
9/10
Financial health
6/10
Operation Advice
  • Based on fundamental analysis, Adobe appears undervalued with a 12-month target price range of $290 - $320, representing approximately 13-25% upside from the current price of $256.24.
  • The recent price weakness from March highs creates an attractive entry point for long-term investors.
  • The low current ratio warrants monitoring but is mitigated by strong cash generation.

Valuation

P/E TTM
14.70
P/E LYR
16.79
P/B MRQ
9.27
P/S TTM
--
AI Analysis
  • Adobe's valuation appears compelling with a low P/E multiple of 14.70 for a high-quality software company with double-digit earnings growth. The stock appears undervalued relative to its earnings power and growth profile, with a reasonable forward P/E of 16.79 and premium P/S multiple justified by high-margin recurring revenue.
  • Current price is $256.24 as of 2026-06-03 close
  • P/E (TTM) is 14.70, which is low for a high-quality software company with double-digit earnings growth
  • Forward P/E (Dynamic) is 16.79, which is reasonable
  • P/B is 9.27, which is high but typical for asset-light software firms with immense intangible value and justified by extraordinary ROE over 40%
  • P/S (TTM) is 5.89, reflecting premium valuation for high-margin, recurring revenue streams
  • 60-day trading range is $224.13 to $282.40, with current price in upper-middle of range
  • Stock appears undervalued relative to its earnings power and growth profile
  • 12-month fundamental target price range is $290 - $320, derived from applying normalized P/E multiple in low 20s to growing earnings
Valuation trend

Profitability

ROE TTM
40.77%
Net margin
30.01%
Gross margin
89.18%
Total revenue
17.57B
AI Analysis
  • Adobe demonstrates outstanding and improving profitability with elite gross margins of 89.18%, net margins of 30.01%, exceptional ROE of 40.77%, and strong ROA of 17.88%. Recent quarterly reports show accelerating profitability with significant year-over-year net income growth.
  • Adobe demonstrates outstanding and improving profitability
  • Company maintains elite gross margin of 89.18% (as of Q3 2025)
  • Very high net margin of 30.01%
  • Return on Equity (ROE) of 40.77% (TTM) is exceptional, indicating highly effective use of shareholder capital
  • Return on Assets (ROA) of 17.88% (TTM) shows efficient deployment of all assets
  • These metrics are among the best in the software industry
  • Recent quarterly reports show strong year-over-year growth in net income
  • 36.03% increase in net income in Q3 2025
  • 192.10% surge in net income in Q1 2025
  • Indicates accelerating profitability alongside steady revenue growth (~10-11% YoY)
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
  • Adobe's financial health presents a mixed picture with strong profitability but concerning liquidity metrics. The current ratio of 1.02 indicates minimal cushion for short-term obligations, while the debt-to-asset ratio of 59.07% is manageable given high-margin, predictable cash flows.
  • Financial health of Adobe presents a mixed picture, characterized by strong profitability but some concerning liquidity metrics
  • Current ratio of 1.02 indicates minimal cushion between current assets and liabilities, suggesting potential vulnerability in meeting short-term obligations
  • This is a point of concern for a company of Adobe's size and stability
  • Debt-to-asset ratio of 59.07% is manageable for a software company with high-margin, predictable cash flows
  • Indicates leverage but not an excessive burden
  • Exceptionally high gross margin (consistently ~89%) and robust net margin (~30%) are hallmarks of a superior software business model
  • These margins generate substantial operating cash flows, which help offset the tight current ratio by providing financial flexibility to service debt and invest
Leverage
2024Q32024Q42025Q12025Q22025Q3
Debt/Asset51.24%53.34%56.28%59.27%59.07%
Liquidity
2024Q32024Q42025Q12025Q22025Q3
Current ratio1.111.071.180.991.02