The calculations below outline how an intrinsic value for
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.
|Levered FCF (USD, Millions)||$2,634.58||$3,302.66||$3,878.33||$4,279.88||$4,806.00|
|Source||Analyst x21||Analyst x22||Analyst x15||Analyst x3||Analyst x1|
Discounted (@ 9.2%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $4,806 × (1 + 2.47%) ÷ (9.2% – 2.47%)
Terminal value based on the Perpetuity Method where growth (g) =
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows +
$61,436 = $14,267 + $47,168
Value = Total value / Shares Outstanding ($61,436 / 493)Discount to Share Price
Value per share:
Current discount (share price of $177.51): -42.43%
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 = 9.2% = 2.47% + (0.893 * 7.53%)
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 ($86,265,027,450).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.893 = 0.881 (1 + (1- 35%) (2.18%))
Levered Beta used in calculation = 0.893
Mr. Shantanu Narayen has been the Chairman of the Board at Adobe Systems Incorporated since February 1, 2017 and its Chief Executive Officer since December 01, 2007 and President 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 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 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.
Average tenure and age of the Adobe Systems management team in years:
Average tenure and age of the Adobe Systems board of directors in years:
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. This segment’s 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, advertising and media optimization, digital experience management, cross-channel campaign management, and audience management solutions, as well as video delivery and monetization 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 eLearning 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.
|Name:||Adobe Systems Incorporated|
Adobe Systems Incorporated
345 Park Avenue,
|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|