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 Rating8/10
Generated at:2026-04-17 17:42:28
Analysis based on 5 financial reports from the following periods: 2025-08-29, 2025-05-30, 2025-02-28, 2024-11-29, 2024-08-30. Current stock price as of 2026-04-17 close. Data includes TTM (Trailing Twelve Months) metrics and recent quarterly growth figures.
Overview

Adobe Inc. (ADBE) is a leading global technology company in the Software - Application sector with a successful subscription-based SaaS model. The analysis reveals a mixed financial picture: exceptional profitability and growth are offset by concerning liquidity and leverage. The core investment thesis is a significant valuation opportunity, with the current stock price appearing substantially undervalued relative to the company's high-quality earnings profile and growth prospects.

Valuation
9/10
Profitability
9/10
Financial health
6/10
Operation Advice
  • Based on fundamental analysis, Adobe presents a compelling buy opportunity for long-term investors.
  • The current price of $244.45 is significantly below the calculated target range of $316-$386, suggesting substantial upside.
  • Investors should consider accumulating shares at or near current levels.
  • Monitor risks related to the company's high debt level, competitive pressures, and economic slowdowns.

Valuation

P/E TTM
13.71
P/E LYR
16.79
P/B MRQ
8.64
P/S TTM
--
AI Analysis
  • Valuation metrics suggest the stock is significantly undervalued. The trailing P/E of 13.92 is low for a company of Adobe's quality, and a justified P/E range of 18-22 implies a target price range of $316 to $386, well above the current price of $244.45.
  • The trailing P/E ratio is 13.92, and the forward (dynamic) P/E is 16.79, which are reasonable or attractive for a software company with Adobe's profile.
  • The P/B ratio of 8.77 is high but typical for asset-light, high-ROE software companies.
  • The P/S ratio of 5.62 (TTM) is premium but justified by best-in-class margins and predictable subscription revenue.
  • The stock's recent 60-day trading range is between a high of $306.30 and a low of $224.13, with the current price near the lower end.
  • Based on the TTM P/E of 13.92 and a price of $244.45, the implied TTM EPS is approximately $17.56.
  • Considering Adobe's quality, a justified P/E range of 18-22 is reasonable.
  • Applying this P/E range to the TTM EPS yields a target price range of $316.08 to $386.32.
  • Compared to this target range, the current price of $244.45 appears significantly undervalued.
  • The stock's decline presents a valuation opportunity based on fundamental metrics.
Valuation trend

Profitability

ROE TTM
40.77%
Net margin
30.01%
Gross margin
89.18%
Total revenue
17.57B
AI Analysis
  • Adobe's profitability metrics are outstanding and form the core of its investment thesis, with exceptionally high returns on equity and assets, strong earnings growth, and remarkably stable gross margins around 89%.
  • The Return on Equity (ROE) of 40.77% (TTM) is exceptionally high, indicating highly efficient use of shareholder capital.
  • The Return on Assets (ROA) of 17.88% (TTM) shows the company generates substantial profit from its asset base, well above industry averages.
  • Revenue growth has been steady in the low double digits, with 10.54% YoY growth in Q3 2025.
  • Net income growth has been very strong recently, with 36.03% YoY growth in Q3 2025 and 192.10% in Q1 2025, demonstrating operating leverage.
  • The gross margin is consistently around 89% across recent quarters, indicating powerful pricing power and a highly scalable software business model.
  • The net margin remains strong, reaching 30.01% in the latest Q3 2025 report, though it has shown some volatility.
  • The remarkably stable ~89% gross margin underscores the economic quality of Adobe's products.
  • Fluctuations in net margin are more tied to operating expenses and other income/charges rather than cost of goods sold.
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
  • The financial health presents a mixed picture: strong profitability and cash flow generation counterbalance concerning liquidity metrics and significant leverage, with a current ratio of 1.02 and a debt-to-asset ratio of 59.07%.
  • The current ratio of 1.02 indicates minimal cushion between current assets and liabilities, suggesting potential vulnerability to short-term obligations.
  • The debt-to-asset ratio of 59.07% reflects a significant use of leverage, which is common for mature tech firms but necessitates consistent cash flow.
  • The company demonstrates exceptional profitability, with a gross margin consistently around 89%.
  • The net margin has shown volatility but remains strong, reaching 30.01% in the latest Q3 2025 report.
  • Robust and growing profits are the primary counterbalance to the elevated leverage.
  • The financial condition is a mixed picture of strong profitability against concerning liquidity metrics.
Leverage
2024Q32024Q42025Q12025Q22025Q3
Debt/Asset51.24%53.34%56.28%59.27%59.07%
Liquidity
2024Q32024Q42025Q12025Q22025Q3
Current ratio1.111.071.180.991.02