Adobe Inc. (ADBE)
Technology · NASDAQ · US
Fundamentals
Valuation and ratings
Adobe Inc. trades at $224.56, which is 132% below the $520.00 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 83 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 12.8 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Adobe Inc.
Adobe Inc. operates as a technology company worldwide. The Digital Media segment offers products and services that enable individuals, teams, and enterprises to create, publish, and promote content. This segment serves photographers, video editors, graphic and experience designers, game developers, content creators, students, marketers, business owners, knowledge workers, and consumers. The Digital Experience segment provides an integrated platform; and products, services, and solutions that enable brands and businesses to create, manage, execute, measure, monetize, and optimize customer experiences from analytics to commerce. This segment serves marketers, advertisers, agencies, publishers, merchandisers, merchants, web analysts, data scientists, developers, and executives across the C-suite. The Publishing and Advertising segment offers e-learning, technical document publishing, web conferencing, document and forms platform, web application development, printing, and Adobe Advertising solutions. It also provides consulting, training, customer management, technical support, and learning services. The company offers its solutions to enterprise customers, and businesses and consumers; and licenses its products to end-user customers through app stores and website at adobe.com. It markets and distributes its products through distributors, retailers, software developers, mobile app stores, systems integrators, independent software vendors, value-added resellers, and original equipment and hardware manufacturers. The company also provides an online visibility management and content marketing software-as-a-service platform. The company has a strategic alliance with HUMAIN for the development of generative AI models and AI-powered applications. The company was formerly known as Adobe Systems Incorporated and changed its name to Adobe Inc. in October 2018. Adobe Inc. was founded in 1982 and is headquartered in San Jose, California.
ADBE passes 6 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
5 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$1.65B · 0.9% of book
- Bill Nygren, HARRIS ASSOCIATES L P$1.12B · 0.8% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$1.02B · 0.5% of book
- Two Sigma, TWO SIGMA INVESTMENTS, LP$760.61M · 0.6% of book
- Dodge & Cox, DODGE & COX$606.63M · 0.3% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Adobe Inc. (ADBE) undervalued?
Against our discounted cash flow estimate of $520.00, ADBE at $224.56 is 132% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own ADBE?
5 of the institutions we track reported a position in ADBE in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is ADBE's P/E ratio?
ADBE trades at 12.8 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for ADBE, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.