ADBE

Adobe

Fundamental data last updated:April 13, 2026

company profile

SECTOR

Technology

industry

Software - Application

Exchange

Nasdaq

County of HQ

United States

Next Earnings Date

06/11/26

Business Summary

Adobe operates a high-margin software platform model where recurring application revenue scales with minimal incremental cost, which explains the 63.10% operating margin. The company monetizes mission-critical creative and digital workflow tools that embed deeply into customer processes, making switching costs substantial. Cash generation is driven by licensing and subscription economics layered over a largely fixed R&D base, producing a 41.30% ROIC. Its moat is not physical assets but ecosystem entrenchment, pricing power, and the ability to continuously layer innovation onto a dominant software backbone.

VALUATION

P/E

13.1

Market Cap ($M USD)

$91,086

Forward P/E

8.6

PEG

0.7

PRICE TO SALES

3.9

PRICE TO BOOK

8

EV / EBITDA

9.1

5-Year Average P/E

DIVIDEND

Yield

-

Annual Payout

-

Payout Ratio

0.00%

Consecutive Years of Dividend Growth

0

5-Year Dividend Growth Rate

-

Financial Health & Profitability

Earnings Per Share

$17.18

Next Year EPS Growth Estimate

$26.36

Next Year Revenue Growth Estimate

9.00%

Return on Equity (ROE)

63.10%

Operating Margin

36.70%

Debt-to-Equity

0.6

Piotroski F-Score

8

Altman Z-Score

7

Return on Invested Capital (ROIC)

41.30%%

Current Ratio

0.9

Quick Ratio

Gainseekers Quantitative Analysis

Summary

At 13.1x earnings and just 8.6x forward earnings, the market is pricing Adobe like a no-growth cyclical despite a forward PEG of 0.7 that screams growth at a discount. The compression from a 13.1 P/E to an 8.6 Forward P/E alongside EPS expansion from 9.1 to 17.18 implies dramatic earnings acceleration that the market is not fully capitalizing. An Altman Z-Score of 7 signals extremely low bankruptcy risk, reinforcing that this is not a distressed multiple but a mispriced one. With a $91,086M market cap and operating margins of 63.10%, the valuation disconnect looks more like sentiment dislocation than structural decay.

AI Exposure / Tech Reliance

As a Software - Application company in the Technology sector, Adobe sits directly in the layer of the stack most disrupted—and enhanced—by AI. Software businesses with high operating margins like 63.10% can integrate AI features while preserving incremental profitability. The model resilience lies in embedding AI into applications rather than being displaced by it.

The Bull Case

A GARP investor buys this because the capital efficiency is elite: ROIC at 41.30% and ROE at 9.00% combined with a Piotroski F-Score of 8 indicate strong operating momentum and balance sheet quality. Operating margins at 63.10% are extraordinary and imply immense pricing power and scalable cost discipline. The forward earnings ramp to 17.18 against a current EPS of 9.1, coupled with a PEG of 0.7, signals growth that is materially underpriced. Add an Altman Z-Score of 7 and you have a financially fortified compounder trading at a single-digit forward multiple—this is classic institutional accumulation territory when fundamentals outrun sentiment.

The Bear Case

Now the problems: Debt/Equity at 36.70% combined with a Current Ratio of 0.9 signals tighter short-term liquidity than you’d expect for a premium software franchise. Price/Book at 8 suggests the balance sheet is heavily intangible and offers limited asset protection if growth stalls. Sales Growth Next Year listed at $26.36 is ambiguous and could imply deceleration or forecasting opacity. The Mean Consensus Target Price of 2.41 and Consensus Rating of 3.60% introduce signal distortion, and with Short % of Float absent, we lack visibility into bearish conviction—opacity is risk.

Market Sentiment & Smart Money

Short Interest %

3.60%

Analyst Consensus

2.41

Average Analyst Price Target

$333.23

Institutional Ownership %

88.30%

1-Year Beta

0.69

Insider Buying % (6 Mo)

0.30%%

Distance to 52-Week High

53.30%%

Distance to 52-Week Low

100.50%%