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Adobe Systems

Nasdaq:ADBE
Snowflake Description

Flawless balance sheet with outstanding track record.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
ADBE
Nasdaq
$120B
Market Cap
  1. Home
  2. US
  3. Software
Company description

Adobe Systems Incorporated operates as a diversified software company worldwide. The last earnings update was 86 days ago. More info.


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3 Month History
ADBE
Industry
5yr Volatility vs Market

ADBE Value

 Is Adobe Systems undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Adobe Systems to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

How is this discounted cash flow calculated?

  • The current share price of Adobe Systems is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Adobe Systems's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Adobe Systems's earnings available for a low price, and how does this compare to other companies in the same industry?
  • Adobe Systems is overvalued based on earnings compared to the US Software industry average.
  • Adobe Systems is overvalued based on earnings compared to the US market.
Price based on expected Growth
Does Adobe Systems's expected growth come at a high price?
  • Adobe Systems is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Adobe Systems's assets?
  • Adobe Systems is overvalued based on assets compared to the US Software industry average.
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Value checks
We assess Adobe Systems's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Software industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Software industry average (and greater than 0)? (1 check)
  5. Adobe Systems has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
    Note 2: PEG ratio is based on analysts EPS growth expectations in 1 year (38.58%).

    Full details on the Value part of the Simply Wall St company analysis model.
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Discounted cash flow (2 Stage Free Cash Flow to Equity)

The calculations below outline how an intrinsic value for Adobe Systems is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.

See our documentation to learn about this calculation.

5 year cash flow forecast

Present value of next 5 years cash flows:
$21,204

Terminal Value

Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate – g)

Terminal Value = $8,377 × (1 + 2.47%) ÷ (9.48% – 2.47%)

Terminal value based on the Perpetuity Method where growth (g) = 2.47%:
$122,452

Present value of terminal value:
$77,856

Equity Value

Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
$99,060 = $21,204 + $77,856

Value = Total value / Shares Outstanding ($99,060 / 492)

Discount to Share Price

Value per share (USD): $201.15

Current discount (share price of $243.56): -21.09%



Estimate of Discount Rate

The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.

Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)

Discount rate = 9.48% = 2.47% + (0.931 * 7.53%)



Estimate of Bottom Up Beta

The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($119,946,074,792).

Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))

0.931 = 0.917 (1 + (1- 2.7%) (1.57%))

Levered Beta used in calculation = 0.931



Assumptions
  1. The risk free rate of 2.47% is from the 10 year government bond rate in USD.
  2. The bottom-up beta is estimated by analysing other companies in the same industry.
  3. The Equity Risk Premium is calculated by subtracting the risk free rate from the market return premium (7.53%) (source: Buffet).
  4. The dividend discount model is automatically used for companies in the following industries: Banks, Insurance, Real Estate Investment Trusts (REITs), Diversified Financial Services and Capital Markets.

ADBE Future Performance

 How is Adobe Systems expected to perform in the next 1 to 3 years based on estimates from 25 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
15.9%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Adobe Systems expected to grow at an attractive rate?
  • Adobe Systems's earnings growth is expected to exceed the low risk savings rate of 4.5%.
Growth vs Market Checks
  • Adobe Systems's earnings growth is expected to exceed the US market average.
  • Adobe Systems's revenue growth is expected to exceed the US market average.
Annual Growth Rates Comparison
Analysts growth expectations
Super high growth metrics
High Growth Checks
  • Adobe Systems's earnings are expected to grow by 15.9% yearly, however this is not considered high growth (20% yearly).
  • Adobe Systems's revenue is expected to grow by 15.3% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Adobe Systems is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).
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Future performance checks
We assess Adobe Systems's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the US market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the US market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Adobe Systems has a total score of 4/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

ADBE Past Performance

  How has Adobe Systems performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Adobe Systems's growth in the last year to its industry (Software).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Adobe Systems's year on year earnings growth rate has been positive over the past 5 years.
  • Adobe Systems's 1-year earnings growth exceeds its 5-year average (43.3% vs 14%)
  • Adobe Systems's earnings growth has exceeded the US Software industry average in the past year (43.3% vs 12.8%).
Earnings and Revenue History
Adobe Systems's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Adobe Systems has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
  • Adobe Systems used its assets more efficiently than the US Software industry average last year based on Return on Assets.
  • Adobe Systems has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).
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Past performance checks
We assess Adobe Systems's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Software industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Adobe Systems has a total score of 6/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

ADBE Health

 How is Adobe Systems's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Adobe Systems's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Adobe Systems is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Adobe Systems's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Adobe Systems's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 4x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
  • Adobe Systems's level of debt (21.8%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has been reduced over the past 5 years (22.5% vs 21.8% today).
  • Debt is well covered by operating cash flow (168.4%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 1474.4x coverage).
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Financial health checks
We assess Adobe Systems's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Adobe Systems has a total score of 6/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

ADBE Dividends

 What is Adobe Systems's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0%
Current annual income from Adobe Systems dividends.
If you bought $2,000 of Adobe Systems shares you are expected to receive $0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Unable to evaluate Adobe Systems's dividend against the low risk savings benchmark as the company has not reported any payouts.
  • Unable to evaluate Adobe Systems's dividend against the market benchmark as the company has not reported any payouts.
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
  • Unable to perform a dividend volatility check as Adobe Systems has not reported any payouts.
  • Unable to verify if Adobe Systems's dividend has been increasing as the company has not reported any payouts.
Current Payout to shareholders
What portion of Adobe Systems's earnings are paid to the shareholders as a dividend.
  • Unable to calculate sustainability of dividends as Adobe Systems has not reported any payouts.
Future Payout to shareholders
  • Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.
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Income/ dividend checks
We assess Adobe Systems's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.5%) - if not then the rest of the checks are ignored.
  2. Current dividend yield, is there one at all, is it higher than the low risk savings rate, and is it above the top 25% of dividend payers? (2 checks)
  3. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  4. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  5. How sustainable is the dividend, can Adobe Systems afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  6. Adobe Systems has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

ADBE Management

 What is the CEO of Adobe Systems's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Shantanu Narayen, image provided by Google.
Shantanu Narayen
COMPENSATION $21,934,030
AGE 53
TENURE AS CEO 10.4 years
CEO Bio

Mr. Shantanu Narayen has been Chairman of Adobe Systems Incorporated since February 1, 2017 and has been its Chief Executive Officer since December 01, 2007 and has been President since January 2005. Mr. Narayen has been Chief Executive Officer of Adobe Systems Software Ireland Limited since 2007 and serves as its President. He serves as Senior Advisor of KKR & Co. L.P. He served as the Chief Operating Officer of Adobe Systems Inc. from January 2005 to December 2007 and served as its Executive Vice President of Worldwide Product Marketing & Development from March 2001 to January 2005. He held key product research and development positions within Adobe, including Senior Vice President of worldwide product development and Vice President and General Manager of the engineering technology group. Before joining Adobe in 1998, Mr. Narayen co-founded Pictra, Inc. He served as director of desktop and collaboration products at Silicon Graphics, Inc. and served various senior management positions at Apple Computer, Inc. He has been Director of Adobe Systems Incorporated since December 01, 2007 and Pfizer Inc. since September 27, 2013. He has been Lead Independent Director of Pfizer Inc., since 2018. He serves as a Director of Adobe Systems Software Ireland Limited and Stario.com. He served as Director of Metavante Technologies, Inc. since November 14, 2007 and Dell Inc. from September 2009 to October 29, 2013. Mr. Narayen is a member of the U.S. President's Management Advisory Board, established in 2010 to provide advice on how to implement best business practices, including the application of technology, on matters related to federal government management and operation. He serves on the Advisory Board of the Haas School of Business, University of California at Berkeley and is President of the board of the Adobe Foundation, which funds philanthropic initiatives around the world. He holds five patents and is a frequent speaker at industry and academic events. Mr. Narayen is Vice Chairman of US-India Strategic Partnership Forum. Mr. Narayen holds Bachelor's Degree, B.S. in Electronics Engineering from Osmania University in India, a Master's degree, M.S. in Computer Science from Bowling Green State University and a Master's Degree, M.B.A. in Business Administration from the Haas School of Business, University of California, Berkeley.

CEO Compensation
  • Shantanu's compensation has been consistent with company performance over the past year.
  • Shantanu's compensation appears reasonable for a company of this size and profit level.
Management Team Tenure

Average tenure and age of the Adobe Systems management team in years:

9.4
Average Tenure
56
Average Age
  • The average tenure for the Adobe Systems management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Shantanu Narayen

TITLE
Chairman
COMPENSATION
$22M
AGE
53
TENURE
10.4 yrs

John Warnock

TITLE
Co-Founder & Director
COMPENSATION
$331K
AGE
76
TENURE
36.3 yrs

Charles Geschke

TITLE
Co-Founder & Director
COMPENSATION
$331K
AGE
78
TENURE
36.3 yrs

Bryan Lamkin

TITLE
Executive VP & General Manager of Digital Media
COMPENSATION
$7M
AGE
56
TENURE
2.7 yrs

Matt Thompson

TITLE
Executive Vice President of Worldwide Field Operations
COMPENSATION
$8M
AGE
58
TENURE
11.3 yrs

Brad Rencher

TITLE
Executive VP & GM of Digital Experience
COMPENSATION
$7M
AGE
43
TENURE
8.3 yrs

John Murphy

TITLE
Executive VP & CFO
AGE
48
TENURE
0.1 yrs

Abhay Parasnis

TITLE
Executive VP & CTO
COMPENSATION
$7M
AGE
42
TENURE
2.8 yrs

Cindy Stoddard

TITLE
Senior VP & Chief Information Officer
AGE
60
TENURE
1.9 yrs

Mike Saviage

TITLE
Vice President of Investor Relations
TENURE
22.5 yrs
Board of Directors Tenure

Average tenure and age of the Adobe Systems board of directors in years:

9.3
Average Tenure
62
Average Age
  • The tenure for the Adobe Systems board of directors is about average.
Board of Directors

Shantanu Narayen

TITLE
Chairman
COMPENSATION
$22M
AGE
53
TENURE
1.3 yrs

John Warnock

TITLE
Co-Founder & Director
COMPENSATION
$331K
AGE
76
TENURE
35.3 yrs

Charles Geschke

TITLE
Co-Founder & Director
COMPENSATION
$331K
AGE
78
TENURE
35.3 yrs

Ned Barnholt

TITLE
Independent Director
COMPENSATION
$353K
AGE
73
TENURE
12.7 yrs

Amy Banse

TITLE
MD & Director
COMPENSATION
$338K
AGE
59
TENURE
6 yrs

Frank Calderoni

TITLE
Director
COMPENSATION
$363K
AGE
60
TENURE
6 yrs

James Daley

TITLE
Lead Director
COMPENSATION
$383K
AGE
75
TENURE
1.3 yrs

Mike Cannon

TITLE
Director
COMPENSATION
$29K
AGE
64

Robert Burgess

TITLE
Director
COMPENSATION
$343K
AGE
59
TENURE
12.4 yrs

Dan Rosensweig

TITLE
Director
COMPENSATION
$360K
AGE
55
TENURE
9.3 yrs
Recent Insider Trading
  • Adobe Systems insiders have only sold shares in the past 3 months.
Who owns this company?
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Management checks
We assess Adobe Systems's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Adobe Systems has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

ADBE News

External News
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Simply Wall St News

A Look At The Intrinsic Value Of Adobe Systems Incorporated (NASDAQ:ADBE)

5-year cash flow estimate 2018 2019 2020 2021 2022 Levered FCF ($, Millions) $3,603.54 $4,275.60 $5,429.18 $7,013.00 $8,377.00 Source Analyst x18 Analyst x18 Analyst x4 Analyst x1 Analyst x1 Present Value Discounted @ 9.48% $3,291.62 $3,567.44 $4,137.84 $4,882.28 $5,327.05 Present Value of 5-year Cash Flow (PVCF)= $21,206 The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. … Terminal Value (TV) = FCF2022 × (1 + g) ÷ (r – g) = $8,377 × (1 + 2.5%) ÷ (9.5% – 2.5%) = $122,516 Present Value of Terminal Value (PVTV) = TV / (1 + r)5 = $122,516 / ( 1 + 9.5%)5 = $77,910 The total value, or equity value, is then the sum of the present value of the cash flows, which in this case is $99,116. … NasdaqGS:ADBE Intrinsic Value May 23rd 18 Important assumptions Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows.

Simply Wall St -

Have Investors Priced In Adobe Systems Incorporated's (NASDAQ:ADBE) Growth?

Since Adobe Systems’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. … Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. … If you are no longer interested in Adobe Systems, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

Simply Wall St -

Did Adobe Systems Incorporated's (NASDAQ:ADBE) Recent Earnings Growth Beat The Trend?

Investors with a long-term horizong may find it valuable to assess Adobe Systems Incorporated's (NASDAQ:ADBE) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. … View our latest analysis for Adobe Systems How Did ADBE's Recent Performance Stack Up Against Its Past? … Given that these values are fairly nearsighted, I’ve determined an annualized five-year value for ADBE's earnings, which stands at US$805.67M This means that, generally, Adobe Systems has been able to gradually grow its earnings over the last couple of years as well.

Simply Wall St -

What Should You Know About Adobe Systems Incorporated's (NASDAQ:ADBE) Profit Margin?

To help investors get a top level understanding, this article will interpret Adobe Systems's margin performance to assist in analysing the revenue and cost anatomy behind the earnings expectations for the future and the impact it has on shareholder returns relative to the wider industry. … Margin Calculation for ADBE Profit Margin = Net Income ÷ Revenue ∴ Profit Margin = 1.88 Billion ÷ 7.70 Billion = 24.40% The past five years have seen Adobe Systems's margin expand, as a result of average net income growth of 14.02% exceeding a 8.90% average growth in revenue, indicating that that the previous revenue growth has been acompanied by a growing portion translated in to earnings. … Thus, it is essential to run your own analysis on Adobe Systems's future earnings whilst keeping a watchful eye over their ability to maintain cost efficiency and top line growth as these are the factors driving future earnings growth according to our preliminary margin analysis.

Simply Wall St -

Is Adobe Systems Incorporated's (NASDAQ:ADBE) Balance Sheet Strong Enough To Weather A Storm?

Additionally, ADBE has produced cash from operations of US$2.91B during the same period of time, leading to an operating cash to total debt ratio of 154.73%, signalling that ADBE’s operating cash is sufficient to cover its debt. … Looking at ADBE’s most recent US$3.53B liabilities, the company has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 2.05x. … We can check to see whether ADBE is able to meet its debt obligations by looking at the net interest coverage ratio.

Simply Wall St -

With An ROE Of 20.02%, Has Adobe Systems Incorporated's (NASDAQ:ADBE) Management Done Well?

View our latest analysis for Adobe Systems Breaking down Return on Equity Return on Equity (ROE) is a measure of Adobe Systems’s profit relative to its shareholders’ equity. … Adobe Systems’s cost of equity is 9.46%. … This is called the Dupont Formula: Dupont Formula ROE = profit margin × asset turnover × financial leverage ROE = (annual net profit ÷ sales) × (sales ÷ assets) × (assets ÷ shareholders’ equity) ROE = annual net profit ÷ shareholders’ equity NasdaqGS:ADBE Last Perf Mar 15th 18 Basically, profit margin measures how much of revenue trickles down into earnings which illustrates how efficient the business is with its cost management.

Simply Wall St -

Should You Sell Adobe Systems Incorporated (NASDAQ:ADBE) At This PE Ratio?

Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for ADBE Price per share = $216.4 Earnings per share = $3.432 ∴ Price-Earnings Ratio = $216.4 ÷ $3.432 = 63.1x The P/E ratio isn’t a metric you view in isolation and only becomes useful when you compare it against other similar companies. … Since ADBE's P/E of 63.1x is higher than its industry peers (34.3x), it means that investors are paying more than they should for each dollar of ADBE's earnings. … For example, if you inadvertently compared riskier firms with ADBE, then investors would naturally value ADBE at a higher price since it is a less risky investment.

Simply Wall St -

Want To Invest In Adobe Systems Incorporated (NASDAQ:ADBE) Today? Read This First

Adobe Systems Incorporated (NASDAQ:ADBE) is considered a high-growth stock, but its last closing price of $201.56 left some investors wondering if this high future earnings potential can be rationalized by its current price tag. … This tells us that Adobe Systems is overvalued compared to the US market average ratio of 18.99x , and overvalued based on current earnings compared to the software industry average of 33.36x. … This tells us that when we include its growth in our analysis Adobe Systems's stock can be considered overvalued , based on the fundamentals.

Simply Wall St -

Is Adobe Systems Incorporated (NASDAQ:ADBE) Worth $192.15 Based On Its Intrinsic Value?

I am going to run you through how I calculated the intrinsic value of Adobe Systems Incorporated (NASDAQ:ADBE) by taking the expected future cash flows and discounting them to their present value. … 5-year cash flow forecast 2018 2019 2020 2021 2022 Levered FCF ($, Millions) $3,575.37 $4,138.68 $4,464.43 $5,398.00 $6,159.00 Source Analyst x21 Analyst x21 Analyst x3 Analyst x1 Analyst x1 Present Value Discounted @ 9.63% $3,261.35 $3,443.60 $3,388.39 $3,737.11 $3,889.46 Present Value of 5-year Cash Flow (PVCF)= $17,720 We now need to calculate the Terminal Value, which accounts for all the future cash flows after the five years. … Terminal Value (TV) = FCF2022 × (1 + g) ÷ (r – g) = $6,159 × (1 + 2.5%) ÷ (9.6% – 2.5%) = $88,160 Present Value of Terminal Value (PVTV) = TV / (1 + r)5 = $88,160 / ( 1 + 9.6%)5 = $55,674 The total value is the sum of cash flows for the next five years and the discounted terminal value, which results in the Total Equity Value, which in this case is $73,394.

Simply Wall St -

Is There Now An Opportunity In Adobe Systems Incorporated (NASDAQ:ADBE)?

Adobe Systems Incorporated (NASDAQ:ADBE) saw a decent share price growth in the teens level on the NasdaqGS over the last few months. … Since Adobe Systems’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. … With profit expected to more than double over the next couple of years, the future seems bright for Adobe Systems.

Simply Wall St -

ADBE Company Info

Map
Description

Adobe Systems Incorporated operates as a diversified software company worldwide. Its Digital Media segment provides tools and solutions that enable individuals, small and medium businesses, and enterprises to create, publish, promote, and monetize their digital content. Its flagship product is Creative Cloud, a subscription service that allows customers to download and install the latest versions of its creative products. This segment serves traditional content creators, Web application developers, and digital media professionals, as well as their management in marketing departments and agencies, companies, and publishers. The company’s Digital Marketing segment offers solutions for how digital advertising and marketing are created, managed, executed, measured, and optimized. This segment provides analytics, social marketing, targeting, media optimization, digital experience management, cross-channel campaign management, audience management, and video delivery and monetization solutions to digital marketers, advertisers, publishers, merchandisers, Web analysts, chief marketing officers, chief information officers, and chief revenue officers. Its Print and Publishing segment offers products and services, such as e-learning solutions, technical document publishing, Web application development, and high-end printing, as well as publishing needs of technical and business, and original equipment manufacturers (OEMs) printing businesses. The company markets and licenses its products and services directly to enterprise customers through its sales force, as well as to end-users through app stores and through its Website at adobe.com. It also distributes products and services through a network of distributors, value-added resellers, systems integrators, independent software vendors, retailers, and OEMs. The company was founded in 1982 and is headquartered in San Jose, California.

Details
Name: Adobe Systems Incorporated
ADBE
Exchange: NasdaqGS
Founded: 1982
$119,946,074,792
492,470,335
Website: http://www.adobe.com
Address: Adobe Systems Incorporated
345 Park Avenue,
San Jose,
California, 95110,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS ADBE Common Stock Nasdaq Global Select US USD 13. Aug 1986
DB ADB Common Stock Deutsche Boerse AG DE EUR 13. Aug 1986
SWX ADBE Common Stock SIX Swiss Exchange CH CHF 13. Aug 1986
WBAG ADBE Common Stock Wiener Boerse AG AT EUR 13. Aug 1986
BMV ADBE * Common Stock Bolsa Mexicana de Valores MX MXN 13. Aug 1986
Number of employees
Current staff
Staff numbers
17,973
Adobe Systems employees.
Industry
Application Software
Software
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2018/05/27 09:07
End of day share price update: 2018/05/25 00:00
Last estimates confirmation: 2018/05/25
Last earnings update: 2018/03/02
Last annual earnings update: 2017/12/01


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.