Adobe Valuation

Is ADBE undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of ADBE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ADBE (CA$20.65) is trading below our estimate of fair value (CA$28.88)

Significantly Below Fair Value: ADBE is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ADBE?

Key metric: As ADBE is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for ADBE. This is calculated by dividing ADBE's market cap by their current earnings.
What is ADBE's PE Ratio?
PE Ratio	42.4x
Earnings	US$5.36b
Market Cap	US$227.11b

ADBE key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	10.8x
Enterprise Value/EBITDA	27.7x
PEG Ratio	2.6x

Price to Earnings Ratio vs Peers

How does ADBE's PE Ratio compare to its peers?

The above table shows the PE ratio for ADBE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	115.6x
CSU Constellation Software	122.1x	27.9%	CA$99.6b
DSG Descartes Systems Group	78.9x	14.4%	CA$14.1b
TOI Topicus.com	80.8x	n/a	CA$10.0b
KXS Kinaxis	180.5x	42.9%	CA$5.0b
ADBE Adobe	42.4x	16.3%	CA$227.1b

Price-To-Earnings vs Peers: ADBE is good value based on its Price-To-Earnings Ratio (42.4x) compared to the peer average (115.6x).

Price to Earnings Ratio vs Industry

How does ADBE's PE Ratio compare vs other companies in the CA Software Industry?

7 Companies	Price / Earnings	Estimated Growth	Market Cap
GRDI Griid Infrastructure	3.3x	n/a	US$70.78m
IDLE.X Generative AI Solutions	0.08x	n/a	US$8.15m
LIQD Liquid Meta Capital Holdings	2.4x	n/a	US$2.74m
SPAI Sparc Al	1.1x	n/a	US$2.61m

7 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: ADBE is good value based on its Price-To-Earnings Ratio (42.4x) compared to the Canadian Software industry average (46.8x).

Price to Earnings Ratio vs Fair Ratio

What is ADBE's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ADBE PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	42.4x
Fair PE Ratio	79.3x

Price-To-Earnings vs Fair Ratio: ADBE is good value based on its Price-To-Earnings Ratio (42.4x) compared to the estimated Fair Price-To-Earnings Ratio (79.3x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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