NasdaqGS:ADBE

Stock Analysis Report

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Executive Summary

Adobe Inc. operates as a diversified software company worldwide.

Rewards

Earnings are forecast to grow 6.28% per year

Earnings grew by 20.6% over the past year

Risk Analysis

No risks detected for ADBE from our risk checks.


Snowflake Analysis

Excellent balance sheet with proven track record.


Similar Companies

Share Price & News

How has Adobe's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ADBE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.8%

ADBE

-0.2%

US Software

2.0%

US Market


1 Year Return

36.7%

ADBE

28.5%

US Software

7.1%

US Market

Return vs Industry: ADBE exceeded the US Software industry which returned 28.5% over the past year.

Return vs Market: ADBE exceeded the US Market which returned 7.1% over the past year.


Shareholder returns

ADBEIndustryMarket
7 Day-1.8%-0.2%2.0%
30 Day12.5%8.6%6.0%
90 Day8.7%8.7%-0.05%
1 Year36.7%36.7%29.4%28.5%9.5%7.1%
3 Year165.4%165.4%126.5%118.7%30.7%22.1%
5 Year376.4%376.4%201.3%182.9%55.6%38.0%

Price Volatility Vs. Market

How volatile is Adobe's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Adobe undervalued compared to its fair value and its price relative to the market?

56.27x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ADBE ($375.17) is trading above our estimate of fair value ($278.69)

Significantly Below Fair Value: ADBE is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ADBE is poor value based on its PE Ratio (56.3x) compared to the Software industry average (49.6x).

PE vs Market: ADBE is poor value based on its PE Ratio (56.3x) compared to the US market (15.6x).


Price to Earnings Growth Ratio

PEG Ratio: ADBE is poor value based on its PEG Ratio (9x)


Price to Book Ratio

PB vs Industry: ADBE is overvalued based on its PB Ratio (17.3x) compared to the US Software industry average (5.8x).


Next Steps

Future Growth

How is Adobe forecast to perform in the next 1 to 3 years based on estimates from 27 analysts?

6.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ADBE's forecast earnings growth (6.3% per year) is above the savings rate (2.2%).

Earnings vs Market: ADBE's earnings (6.3% per year) are forecast to grow slower than the US market (21.6% per year).

High Growth Earnings: ADBE's earnings are forecast to grow, but not significantly.

Revenue vs Market: ADBE's revenue (13.6% per year) is forecast to grow faster than the US market (8.8% per year).

High Growth Revenue: ADBE's revenue (13.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ADBE's Return on Equity is forecast to be high in 3 years time (38.4%)


Next Steps

Past Performance

How has Adobe performed over the past 5 years?

35.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ADBE has high quality earnings.

Growing Profit Margin: ADBE's current net profit margins (27.7%) are lower than last year (28.1%).


Past Earnings Growth Analysis

Earnings Trend: ADBE's earnings have grown significantly by 35.7% per year over the past 5 years.

Accelerating Growth: ADBE's earnings growth over the past year (20.6%) is below its 5-year average (35.7% per year).

Earnings vs Industry: ADBE earnings growth over the past year (20.6%) exceeded the Software industry 6.3%.


Return on Equity

High ROE: ADBE's Return on Equity (30.9%) is considered high.


Next Steps

Financial Health

How is Adobe's financial position?


Financial Position Analysis

Short Term Liabilities: ADBE's short term assets ($6.5B) exceed its short term liabilities ($5.2B).

Long Term Liabilities: ADBE's short term assets ($6.5B) exceed its long term liabilities ($5.5B).


Debt to Equity History and Analysis

Debt Level: ADBE's debt to equity ratio (39.3%) is considered satisfactory.

Reducing Debt: ADBE's debt to equity ratio has increased from 27% to 39.3% over the past 5 years.

Debt Coverage: ADBE's debt is well covered by operating cash flow (115.1%).

Interest Coverage: ADBE's interest payments on its debt are well covered by EBIT (45.1x coverage).


Balance Sheet


Next Steps

Dividend

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


Dividend Yield vs Market

Notable Dividend: Unable to evaluate ADBE's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate ADBE's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ADBE's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ADBE's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ADBE's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.8yrs

Average management tenure


CEO

Shantanu Narayen (55yo)

12.42yrs

Tenure

US$39,145,631

Compensation

Mr. Shantanu Narayen has been Chairman of Adobe Inc. (formerly known as Adobe Systems Incorporated) since January 2017, has been its Chief Executive Officer since December 01, 2007, and has been President  ...


CEO Compensation Analysis

Compensation vs Market: Shantanu's total compensation ($USD39.15M) is above average for companies of similar size in the US market ($USD11.74M).

Compensation vs Earnings: Shantanu's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Shantanu Narayen
Chairman12.42yrsUS$39.15m0.086% $156.3m
John Warnock
Co-Founder & Independent Director37.33yrsUS$351.71k0.096% $173.0m
Charles Geschke
Co-Founder & Director Emeritus0.083yrUS$351.71k0.023% $40.8m
John Murphy
Executive VP & CFO2.08yrsUS$7.46m0.0040% $7.1m
Abhay Parasnis
Executive VP of Strategy & Growth and CTO4.83yrsUS$7.50m0.0073% $13.2m
Bryan Lamkin
Executive VP & General Manager of Digital Media4.67yrsUS$7.58m0.021% $37.1m
Scott Belsky
Chief Product Officer & Executive VP of Creative Cloud2.42yrsUS$7.42m0.0027% $4.8m
Mark Garfield
VP, Chief Accounting Officer & Corporate Controller1.42yrsno data0.000020% $36.2k
Cynthia Stoddard
Senior VP & Chief Information Officer3.92yrsno datano data
Mike Saviage
Vice President of Investor Relations24.5yrsno datano data

4.8yrs

Average Tenure

55yo

Average Age

Experienced Management: ADBE's management team is considered experienced (4.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Shantanu Narayen
Chairman12.42yrsUS$39.15m0.086% $156.3m
John Warnock
Co-Founder & Independent Director37.33yrsUS$351.71k0.096% $173.0m
Charles Geschke
Co-Founder & Director Emeritus0.083yrUS$351.71k0.023% $40.8m
Frank Calderoni
Independent Director8yrsUS$401.71k0.0058% $10.6m
Daniel Rosensweig
Independent Director11.33yrsUS$371.71k0.0032% $5.8m
James Daley
Independent Lead Director3.33yrsUS$421.71k0.0073% $13.2m
Amy Banse
Independent Director8yrsUS$391.71k0.0074% $13.4m
Laura Desmond
Independent Director8yrsUS$366.71k0.0059% $10.6m
David Ricks
Independent Director2.08yrsUS$366.71k0.00050% $903.8k
Kathleen Oberg
Independent Director1.33yrsUS$425.39k0.00028% $506.1k

5.7yrs

Average Tenure

59.5yo

Average Age

Experienced Board: ADBE's board of directors are considered experienced (5.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: ADBE insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Adobe Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Adobe Inc.
  • Ticker: ADBE
  • Exchange: NasdaqGS
  • Founded: 1982
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$180.757b
  • Shares outstanding: 481.80m
  • Website: https://www.adobe.com

Number of Employees


Location

  • Adobe Inc.
  • 345 Park Avenue
  • San Jose
  • California
  • 95110
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ADBENasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 1986
ADBXTRA (XETRA Trading Platform)YesCommon StockDEEURAug 1986
ADBDB (Deutsche Boerse AG)YesCommon StockDEEURAug 1986
ADBESWX (SIX Swiss Exchange)YesCommon StockCHCHFAug 1986
ADS-UETLX (Eurotlx)YesCommon StockITEURAug 1986
ADBE *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNAug 1986
ADBEWBAG (Wiener Boerse AG)YesCommon StockATEURAug 1986
ADBEBASE (Buenos Aires Stock Exchange)CEDEAR EACH 11 REP 1 COM USD0.0001ARARSApr 2019
ADBE34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REP 0.2 COM USD0.0001BRBRLMay 2019

Biography

Adobe Inc. 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 customer to download and access 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 Experience 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, marketing automation, 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 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 offers 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, software vendors and developers, retailers, and OEMs. The company was formerly known as Adobe Systems Incorporated and changed its name to Adobe Inc. in October 2018. The company was founded in 1982 and is headquartered in San Jose, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/28 01:33
End of Day Share Price2020/05/27 00:00
Earnings2020/02/28
Annual Earnings2019/11/29


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.