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Adobe
(NASDAQ:ADBE)
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Rating:79Outperform
Price Target:
$265.00
▼(-3.26% Downside)
Action:Reiterated
Date:09/15/26
The score is driven primarily by strong financial performance—elite margins and excellent free-cash-flow generation—supported by a reasonable earnings multiple. Earnings-call commentary is a net positive with raised guidance and strong AI/ARR momentum, but near-term growth quality risks (slower revenue growth, single-digit RPO growth, and sharply lower net new ARR) plus mixed technicals keep the overall score below the highest tier.
Positive Factors
Exceptional profitability and cash conversion
Adobe’s high gross and net margins demonstrate strong software economics, while free cash flow converting at about 98% of net income shows that reported earnings translate into cash. This combination supports sustained reinvestment in products, AI capabilities, and shareholder returns.
Negative Factors
Material slowdown in revenue growth
The deceleration from prior growth rates indicates that Adobe’s large installed base is producing slower incremental expansion. Even with strong profitability, softer top-line momentum can limit operating leverage and reduce the pace at which the company compounds earnings.
Read all positive and negative factors
Positive Factors
Negative Factors
Exceptional profitability and cash conversion
Adobe’s high gross and net margins demonstrate strong software economics, while free cash flow converting at about 98% of net income shows that reported earnings translate into cash. This combination supports sustained reinvestment in products, AI capabilities, and shareholder returns.
Read all positive factors
Adobe Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down sales by region (e.g., Americas, EMEA, APAC), revealing where Adobe is strongest, where growth is accelerating or slowing, and how currency or regional exposure could affect future results.
Breaks down sales by region (e.g., Americas, EMEA, APAC), revealing where Adobe is strongest, where growth is accelerating or slowing, and how currency or regional exposure could affect future results.
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The Fly
The FlyAdobe (ADBE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$96.17B
Dividend YieldN/A
Average Volume (3M)5.01M
Price to Earnings (P/E)13.8
Beta (1Y)0.97
Revenue Growth12.03%
EPS Growth11.41%
CountryUS
Employees31,360
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)17.95
Shares Outstanding389,200,000
10 Day Avg. Volume4,446,110
30 Day Avg. Volume5,006,389
Financial Highlights & Ratios
PEG Ratio0.55
Price to Book (P/B)11.73
Price to Sales (P/S)5.74
P/FCF Ratio13.84
Enterprise Value/Market Cap1.21
Enterprise Value/Revenue4.48
Enterprise Value/Gross Profit5.03
Enterprise Value/Ebitda11.37
Forecast
1Y Price Target
$262.09Price Target Upside-4.32% Downside
Rating ConsensusHold
Number of Analyst Covering24
EPS Forecast (FY)24.48
Revenue Forecast (FY)$26.61B
Adobe Business Overview & Revenue Model
Company Description
Adobe Inc. stands as a prominent global software provider, delivering a diverse range of solutions. Its operations are structured into three primary business divisions: Digital Media, Digital Experience, and Publishing and Advertising. The Digital...
How the Company Makes Money
Adobe primarily makes money by selling software subscriptions and cloud services across three main product areas: (1) Creative tools, (2) Digital experience and marketing tools, and (3) Document solutions. Its core revenue model is recurring subsc...
Adobe Earnings Call Summary
Earnings Call Date:Sep 10, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Dec 09, 2026
Earnings Call Sentiment Positive
The call was strongly positive, supported by record revenue and cash flow, double-digit subscription and ARR growth, substantial expansion in monthly active users, accelerating Firefly usage, strong enterprise activity, and raised full-year revenue and EPS targets. The main challenges were single-digit RPO growth, a 36% to 37% year-over-year decline in net new ARR, the stated near-term headwinds from the freemium strategy and deferred pricing initiatives, and a slight Q4 FX headwind. Highlights significantly outweighed the lowlights.Positive Updates
Record Q3 Revenue and EPS Growth
Adobe achieved record Q3 revenue of $6.76 billion, growing 13% year over year as reported and 12% in constant currency. GAAP EPS was $4.62, up 11% year over year, while non-GAAP EPS was $6.13, up 15%.
Negative Updates
RPO Growth in the Single Digits
Remaining performance obligations were $22.16 billion exiting the quarter, growing 8% year over year, while CRPO grew 9% year over year both as reported and in constant currency. Management confirmed that RPO growth was in the single digits and said the result reflected continued execution against strategic initiatives and a focus on accelerating new-user acquisition through the freemium business model.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Q3 Revenue and EPS Growth
Adobe achieved record Q3 revenue of $6.76 billion, growing 13% year over year as reported and 12% in constant currency. GAAP EPS was $4.62, up 11% year over year, while non-GAAP EPS was $6.13, up 15%.
Read all positive updates
Company Guidance
For Q4 FY 26, Adobe is targeting Total Adobe revenue of $6.8 billion to $6.85 billion, Business professionals and consumer subscription revenue of $1.93 billion to $1.95 billion, Creative and Marketing Professional subscription revenue of $4.665 billion to $4.695 billion, GAAP EPS of $4.65 to $4.70 and non GAAP EPS of $6.30 to $6.35, with non GAAP operating margin of approximately 44%, GAAP tax rate of approximately 2% and a non GAAP tax rate of approximately 18%; for FY 2026, it is targeting total Adobe revenue of $26.576 billion to $26.626 billion, Business Professionals and Consumer subscription revenue of $7.47 billion to $7.49 billion, Creative and Marketing Professional subscription revenue $18.242 billion to $18.272 billion, total Adobe ending ARR, book of business growth of 10.2% year over year compared to our FY 2026 beginning book of business of $25.66 billion, GAAP EPS of $18.12 to $18.17 and non GAAP EPS of $24.45 to $24.50, with non GAAP operating margin approximately 45%, a GAAP tax rate of approximately 22.5%, and a non GAAP tax rate of approximately 18%; Q4 will be larger than the Q3 number, Q4 is our seasonally strong quarter, and a very strong enterprise quarter for us.Adobe Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
78
Positive
Cash Flow
90
Very Positive
| Breakdown | TTM | Nov 2025 | Nov 2024 | Nov 2023 | Nov 2022 | Nov 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 25.97B | 23.77B | 21.50B | 19.41B | 17.61B | 15.79B |
| Gross Profit | 23.14B | 21.22B | 19.15B | 17.05B | 15.44B | 13.92B |
| EBITDA | 10.24B | 9.81B | 7.96B | 7.78B | 6.95B | 6.60B |
| Net Income | 7.28B | 7.13B | 5.56B | 5.43B | 4.76B | 4.82B |
Balance Sheet | ||||||
| Total Assets | 29.98B | 29.50B | 30.23B | 29.78B | 27.16B | 27.24B |
| Cash, Cash Equivalents and Short-Term Investments | 5.64B | 6.59B | 7.89B | 7.84B | 6.10B | 5.80B |
| Total Debt | 6.76B | 6.65B | 6.06B | 4.08B | 4.63B | 4.67B |
| Total Liabilities | 18.22B | 17.87B | 16.13B | 13.26B | 13.11B | 12.44B |
| Stockholders Equity | 11.76B | 11.62B | 14.11B | 16.52B | 14.05B | 14.80B |
Cash Flow | ||||||
| Free Cash Flow | 10.94B | 9.85B | 7.87B | 6.94B | 7.40B | 6.89B |
| Operating Cash Flow | 11.15B | 10.03B | 8.06B | 7.30B | 7.84B | 7.22B |
| Investing Cash Flow | -2.11B | -1.19B | 149.00M | 776.00M | -570.00M | -3.54B |
| Financing Cash Flow | -11.99B | -11.06B | -7.72B | -5.18B | -6.83B | -4.30B |
Adobe Technical Analysis
Positive
273.92
Price Trends
256.18
Negative
242.98
Positive
253.70
Negative
Market Momentum
-2.20
Negative
51.56
Neutral
73.35
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADBE, the sentiment is Positive. The current price of 273.92 is above the 20-day moving average (MA) of 239.42, above the 50-day MA of 256.18, and above the 200-day MA of 253.70, indicating a neutral trend. The MACD of -2.20 indicates Negative momentum. The RSI at 51.56 is Neutral, neither overbought nor oversold. The STOCH value of 73.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ADBE.
Adobe Risk Analysis
Adobe disclosed 23 risk factors in its most recent earnings report. Adobe reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Adobe Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $199.54B | 21.88 | 20.15% | 0.72% | 11.23% | 58.19% | |
82 Outperform | $14.33B | 44.70 | 17.74% | ― | 8.59% | 20.88% | |
79 Outperform | $96.17B | 13.77 | 62.88% | ― | 12.03% | 11.41% | |
69 Neutral | $11.70B | 82.89 | 7.75% | ― | 21.08% | ― | |
69 Neutral | $54.09B | -1,022.62 | -4.39% | ― | 26.02% | 81.08% | |
62 Neutral | $11.48B | -6.84 | -108.20% | ― | 43.43% | -1737.89% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
ADBE
Adobe
256.73
-100.82
-28.20%
CRM
Salesforce
242.45
-18.74
-7.18%
HUBS
HubSpot
234.63
-243.38
-50.92%
TEAM
Atlassian
214.75
46.04
27.29%
DOCU
DocuSign
76.66
4.22
5.82%
FIG
Figma, Inc. Class A
21.54
-34.17
-61.34%
Adobe Corporate Events
Business Operations and StrategyExecutive/Board Changes
Adobe names Anil Chakravarthy as new CEO
Positive
Sep 8, 2026
On September 2, 2026, Adobe’s board appointed Anil Chakravarthy, currently president of the Customer Experience Orchestration business and worldwide field operations, as president and chief executive officer and a director, effective Decembe...
Business Operations and StrategyExecutive/Board Changes
Adobe bolsters executive retention amid CEO transition
Neutral
Jul 17, 2026
On July 14, 2026, Adobe’s Executive Compensation Committee approved a retention letter for executive Louise Pentland that provides defined severance benefits if she is terminated without cause or resigns for good reason. The package includes...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.