US · Nasdaq · ADBE
Adobe (ADBE) stock analysis: valuation and financials
Technology · Computer Software: Prepackaged Software
$247.09 +0.8% Price as of Oct 19, 2026
Narrow-moat, 89% gross margin, 63% ROIC, near-zero net debt, ~10% growth; at 13.2x P/E the reverse DCF implies -4.9% FCF growth, so the market is mispricing durability.
- Market cap
- $96.2B
- P/E
- 13.2x
- EV/Sales
- 3.7x
- FCF yield
- 11.0%
- 52-week range
- $193.41 – $359.91
- Next earnings
- Dec 9, 2026
Research as of Oct 20, 2026
Business quality scorecard
- Growth62
- Profitability100
- Cash flow83
- Balance sheet66
- Capital allocation100
- Valuation98
0–100, computed from reported financials; higher is better, and a higher valuation score means cheaper.
How it makes money
Professionals, consumers and enterprises pay recurring subscription fees for creative, document and marketing software (96.4% of revenue); Digital Media, 74.3% of revenue, is the profit engine within a 36.6% company operating margin.
Financials by year
| FY2021Dec 2020–Nov 2021 | FY2022Dec 2021–Nov 2022 | FY2023Dec 2022–Nov 2023 | FY2024Dec 2023–Nov 2024 | FY2025Dec 2024–Nov 2025 | |
|---|---|---|---|---|---|
| Revenue | $15.8B | $17.6B | $19.4B | $21.5B | $23.8B |
| Revenue growth | +22.7% | +11.5% | +10.2% | +10.8% | +10.5% |
| Gross margin | 88.2% | 87.7% | 87.9% | 89.0% | 89.3% |
| Operating margin | 36.8% | 34.6% | 34.3% | 31.3% | 36.6% |
| Net income | $4.8B | $4.8B | $5.4B | $5.6B | $7.1B |
| Free cash flow | $6.9B | $7.4B | $6.9B | $7.9B | $9.9B |
| FCF margin | 43.6% | 42.0% | 35.8% | 36.6% | 41.4% |
Amounts in USD · What is free cash flow?
Margins Gross margin 89.3% FY2025 vs 89.0% FY2024; Q3 FY2026 slipped to 88.7% as cost of revenue rose 19%. Operating margin jumped to 36.6% from 31.4% on flat opex and no repeat of the $1B Figma fee.
- Cash flow HealthyTTM operating cash flow $10.81B exceeds net income $7.28B, a 1.40x cash conversion; FY2025 OCF rose 25% to $10.03B off a Figma-fee-depressed FY2024 base.
- Debt LowNet debt just $724M against $10.04B EBITDA, or 0.07x; total debt $6.36B is covered by $4.36B cash plus $1.28B short-term investments.
Balance sheet Leverage · Low
- Cash & short-term investments
- $5.6B
- Total debt
- $6.4B
- Net debt
- $724.0M
- Net debt / EBITDA
- 0.1x
- Interest coverage
- 35.7x
- Current ratio
- 0.8x
As of Aug 28, 2026 · Amounts in USD · How to read a balance sheet
Management and track record
- Management StrongFY2025 revenue $23.8B, +10.5% y/y and 13.1% five-year CAGR, with operating margin at 36.6% and free cash flow $9.85B, a 41.5% margin.
- Credibility HighRevenue exceeded the high end of guidance in all five checkable quarters, e.g. Q3 FY2026 $6.76B vs $6.67B-$6.72B and Q2 FY2026 $6.618B vs $6.43B-$6.48B.
Of 14 guided figures checked: 11 beat, 2 in range, 1 missed.
Valuation range
Implied value per share · Price when researched: $247.09
Each scenario assumes five years of revenue growth, an FCF margin and an exit multiple, discounted to today. The assumptions and sensitivities are in the full report.
The full report also covers
- Revenue, growth and outlook of each segment
- Moat and main competitors
- Key risks
- Capital allocation: where the free cash flow went
- What management promised, and what they delivered
- Scenario assumptions and sensitivities
- A source for every claim
- Ask AI about this company
The full report is for members.