NasdaqGS:ADBE

Stock Analysis Report

Executive Summary

Adobe Inc. operates as a diversified software company worldwide.

Snowflake

Fundamentals

Reasonable growth potential 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


Market Performance


7 Day Return

0.5%

ADBE

1.1%

US Software

1.0%

US Market


1 Year Return

16.9%

ADBE

24.2%

US Software

6.7%

US Market

Return vs Industry: ADBE underperformed the US Software industry which returned 24.2% over the past year.

Return vs Market: ADBE exceeded the US Market which returned 6.7% over the past year.


Share holder returns

ADBEIndustryMarket
7 Day0.5%1.1%1.0%
30 Day-0.02%-0.6%-1.8%
90 Day-9.0%-3.0%-1.8%
1 Year16.9%16.9%25.9%24.2%9.1%6.7%
3 Year158.9%158.9%123.3%114.6%46.1%36.6%
5 Year330.3%330.3%180.8%160.4%66.9%48.6%

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 based on future cash flows and its price relative to the stock market?

48.83x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Undervalued: ADBE ($278.29) is trading above our estimate of fair value ($214.12)

Significantly Undervalued: ADBE is trading above our estimate of fair value.


Price Based on Earnings

PE vs Industry: ADBE is poor value based on its PE Ratio (48.8x) compared to the Software industry average (47.7x).

PE vs Market: ADBE is poor value based on its PE Ratio (48.8x) compared to the US market (17.5x).


Price Based on Expected Growth

Low PEG Ratio: ADBE is poor value based on its PEG Ratio (2.8x)


Price Based on Value of Assets

PB vs Industry: ADBE is overvalued based on its PB Ratio (13.2x) compared to the US Software industry average (5.3x).


Next Steps

Future Growth

How is Adobe expected to perform in the next 1 to 3 years based on estimates from 26 analysts?

17.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: ADBE's forecast earnings growth (17.1% per year) is above the savings rate (2.7%).

Earnings vs Market: ADBE's earnings (17.1% per year) are forecast to grow faster than the US market (14.5% per year).

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

Revenue vs Market: ADBE's revenue (13.9% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: ADBE's revenue (13.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High 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?

40.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: ADBE's earnings have grown significantly by 40.3% per year over the past 5 years.

Accelerating Growth: ADBE's earnings growth over the past year (15.2%) is below its 5-year average (40.3% per year).

Earnings vs Industry: ADBE earnings growth over the past year (15.2%) underperformed the Software industry 19.1%.


Return on Equity

High ROE: ADBE's Return on Equity (27.1%) is considered high.


Return on Assets

ROA vs Industry: ADBE has a higher Return on Assets than the Software industry average last year.


Return on Capital Employed

ROCE Improving: ADBE has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Adobe's financial position?


Financial Position Analysis

Short Term Liabilities: ADBE's short term assets ($5.8B) do not cover its short term liabilities ($7.8B)

Long Term Liabilities: ADBE's short term assets (5.8B) exceeds its long term liabilities (2.0B)


Debt to Equity History and Analysis

Debt Level: ADBE's debt to equity ratio (40.4%) is considered high

Reducing Debt: ADBE's debt to equity ratio has increased from 22.3% to 40.4% over the past 5 years.

Debt Coverage: ADBE's debt is well covered by operating cash flow (100.4%).

Interest Coverage: ADBE's interest payments on its debt are well covered by EBIT (39.8x coverage).


Balance Sheet

Inventory Level: ADBE has a low level of unsold assets or inventory.

Debt Coverage by Assets: ADBE's debt is covered by short term assets (assets are 1.389910x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.5%markettop25%3.8%industryaverage1.6%forecastin3Years0%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

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

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

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

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

4.2yrs

Average management tenure


CEO

Shantanu Narayen (55yo)

11.8yrs

Tenure

US$28,397,528

Compensation

Mr. Shantanu Narayen has been Chairman of Adobe Systems Incorporated since January 2017 and has been its Chief Executive Officer since December 01, 2007 and has been President since January 2005. Mr. Naray ...


CEO Compensation Analysis

Compensation vs. Market: Shantanu's total compensation ($USD28.40M) is about average for companies of similar size in the US market ($USD11.20M).

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


Management Age and Tenure

4.2yrs

Average Tenure

55yo

Average Age

Experienced Management: ADBE's management team is considered experienced (4.2 years average tenure).


Board Age and Tenure

5.1yrs

Average Tenure

59.5yo

Average Age

Experienced Board: ADBE's board of directors are considered experienced (5.1 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$859,11431 Jul 19
Dana Rao
EntityIndividual
Shares2,832
Max PriceUS$303.36
SellUS$4,000,01827 Jun 19
Charles Geschke
EntityIndividual
Role
Chairman of the Board
Co-Founder & Director
Shares13,795
Max PriceUS$291.41
SellUS$1,187,76620 Jun 19
John Warnock
EntityIndividual
Role
Chairman of the Board
Co-Founder & Director
Shares4,000
Max PriceUS$296.94
SellUS$406,73302 Apr 19
Scott Belsky
EntityIndividual
Role
Senior Key Executive
Chief Product Officer & Executive VP of Creative Cloud
Shares1,500
Max PriceUS$271.16
SellUS$520,93921 Mar 19
John Warnock
EntityIndividual
Role
Chairman of the Board
Co-Founder & Director
Shares2,000
Max PriceUS$260.47
SellUS$1,518,97720 Mar 19
Dana Rao
EntityIndividual
Shares5,955
Max PriceUS$255.08
SellUS$7,393,72231 Jan 19
Bradley Rencher
EntityIndividual
Shares30,000
Max PriceUS$246.46
SellUS$6,000,02031 Jan 19
Abhay Parasnis
EntityIndividual
Role
Chief Technology Officer
Executive VP & CTO
Shares25,000
Max PriceUS$240.00
SellUS$8,291,79831 Jan 19
Bryan Lamkin
EntityIndividual
Role
Senior Key Executive
Executive VP & General Manager of Digital Media
Shares34,764
Max PriceUS$238.52
BuyUS$16,24421 Dec 18
David Ricks
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares75
Max PriceUS$216.58
SellUS$2,943,56002 Nov 18
Bradley Rencher
EntityIndividual
Shares12,000
Max PriceUS$245.30

Ownership Breakdown


Management Team

  • Bryan Lamkin (58yo)

    Executive VP & General Manager of Digital Media

    • Tenure: 4.1yrs
    • Compensation: US$8.19m
  • John Warnock (78yo)

    Co-Founder & Director

    • Tenure: 0yrs
    • Compensation: US$323.72k
  • Charles Geschke (80yo)

    Co-Founder & Director

    • Tenure: 0yrs
    • Compensation: US$323.72k
  • Cindy Stoddard (62yo)

    Senior VP & Chief Information Officer

    • Tenure: 3.3yrs
  • Shantanu Narayen (55yo)

    Chairman

    • Tenure: 11.8yrs
    • Compensation: US$28.40m
  • Mike Saviage

    Vice President of Investor Relations

    • Tenure: 23.9yrs
  • John Murphy (50yo)

    Executive VP & CFO

    • Tenure: 1.5yrs
    • Compensation: US$7.82m
  • Scott Belsky (39yo)

    Chief Product Officer & Executive VP of Creative Cloud

    • Tenure: 1.8yrs
    • Compensation: US$12.51m
  • Abhay Parasnis (44yo)

    Executive VP & CTO

    • Tenure: 4.3yrs
    • Compensation: US$7.21m
  • Mark Garfield (48yo)

    VP, Chief Accounting Officer & Corporate Controller

    • Tenure: 0.8yrs

Board Members

  • John Warnock (78yo)

    Co-Founder & Director

    • Tenure: 0yrs
    • Compensation: US$323.72k
  • Charles Geschke (80yo)

    Co-Founder & Director

    • Tenure: 0yrs
    • Compensation: US$323.72k
  • Frank Calderoni (62yo)

    Independent Director

    • Tenure: 7.4yrs
    • Compensation: US$370.09k
  • Dan Rosensweig (57yo)

    Independent Director

    • Tenure: 10.8yrs
    • Compensation: US$350.97k
  • James Daley (77yo)

    Lead Director

    • Tenure: 2.8yrs
    • Compensation: US$397.35k
  • Shantanu Narayen (55yo)

    Chairman

    • Tenure: 11.8yrs
    • Compensation: US$28.40m
  • Amy Banse (61yo)

    MD & Director

    • Tenure: 7.4yrs
    • Compensation: US$354.65k
  • Laura Desmond (53yo)

    Independent Director

    • Tenure: 7.4yrs
    • Compensation: US$342.35k
  • Dave Ricks (51yo)

    Independent Director

    • Tenure: 1.5yrs
    • Compensation: US$311.73k
  • Leeny Oberg (58yo)

    Independent Director

    • Tenure: 0.8yrs

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$134.714b
  • Shares outstanding: 484.08m
  • 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
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, publ ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 01:02
End of Day Share Price2019/10/11 00:00
Earnings2019/08/30
Annual Earnings2018/11/30


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.

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