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Adobe
(NASDAQ:ADBE)
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Rating:76Outperform
Price Target:
$247.00
▲(1.04% Upside)
Action:Reiterated
Date:06/12/26
The score is driven by strong underlying financial quality (margins, earnings power, cash conversion) and supportive valuation (low P/E). This is partially offset by weak technicals (price below key moving averages, negative MACD) and near-term execution/timing risks discussed on the earnings call (freemium-led ARR headwind and leadership transitions).
Positive Factors
Recurring subscription scale (ARR)
Large, growing ARR underpins predictable recurring revenue and strong customer retention. With $27.1B ending ARR and steady subscription renewals across Creative, Document and Experience Clouds, Adobe has durable cash visibility that supports long-term R&D, enterprise deals, and disciplined capital returns.
Negative Factors
Freemium-led ARR headwind
Prioritizing freemium MAU over near‑term ARR is a strategic tradeoff that will depress subscription revenue and reported ARR in the coming quarters. While aimed at longer‑term monetization, this slows revenue conversion and cash flow growth over the 2–6 month horizon, complicating near‑term execution.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring subscription scale (ARR)
Large, growing ARR underpins predictable recurring revenue and strong customer retention. With $27.1B ending ARR and steady subscription renewals across Creative, Document and Experience Clouds, Adobe has durable cash visibility that supports long-term R&D, enterprise deals, and disciplined capital returns.
Read all positive factors
Adobe Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down Adobe’s sales across regions (e.g., North America, EMEA, Asia‑Pacific). Reveals geographic concentration, exposure to local economic and currency risks, and which markets are driving growth or underperforming relative to peers.
Breaks down Adobe’s sales across regions (e.g., North America, EMEA, Asia‑Pacific). Reveals geographic concentration, exposure to local economic and currency risks, and which markets are driving growth or underperforming relative to peers.
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The Fly
The FlyAdobe (ADBE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$86.68B
Dividend YieldN/A
Average Volume (3M)7.57M
Price to Earnings (P/E)12.7
Beta (1Y)0.90
Revenue Growth11.49%
EPS Growth11.45%
CountryUS
Employees30,709
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)17.50
Shares Outstanding397,500,000
10 Day Avg. Volume6,234,343
30 Day Avg. Volume7,574,209
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 Cap0.94
Enterprise Value/Revenue3.23
Enterprise Value/Gross Profit3.63
Enterprise Value/Ebitda8.20
Forecast
1Y Price Target
$257.19Price Target Upside5.21% Upside
Rating ConsensusHold
Number of Analyst Covering27
EPS Forecast (FY)24.35
Revenue Forecast (FY)$26.49B
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 makes money primarily through recurring subscriptions and, to a lesser extent, services and other revenue tied to its software platforms. The company’s key revenue streams are: (1) Creative Cloud subscriptions, where individuals and teams pa...
Adobe Earnings Call Summary
Earnings Call Date:Jun 11, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Sep 10, 2026
Earnings Call Sentiment Positive
The call presented multiple strong operating and financial positives — record revenue, ARR growth, large MAU and traffic gains, rapid AI‑first and Firefly ARR traction, sizable SEMrush acquisition, and healthy cash flow and buybacks. Management also articulated a strategic pivot to aggressively grow freemium MAU to capture the AI‑driven opportunity. That pivot and the decision to defer Creative Cloud pricing/line optimizations create an explicit near‑term ARR headwind, plus a small non‑cash impairment and leadership transitions add short‑term risk. On balance, the fundamental business momentum, AI traction, and raised financial targets outweigh the near‑term trade‑offs and risks.Positive Updates
Record Revenue and EPS Growth
Q2 revenue of $6.62 billion, up 11% year‑over‑year (13% as reported). GAAP EPS of $4.25 (+8% YoY) and non‑GAAP EPS of $5.96 (+18% YoY). Management cited record top‑line revenue and disciplined investments as drivers of EPS growth.
Negative Updates
Near‑term ARR Headwind from Freemium Push
Company announced a strategic shift to accelerate freemium acquisition (Adobe and Firefly) and will prioritize MAU growth over near‑term ARR. Management acknowledged this will lower second‑half ARR expectations and be a short‑term headwind to ARR growth; they expect payback to play out over 2027.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Revenue and EPS Growth
Q2 revenue of $6.62 billion, up 11% year‑over‑year (13% as reported). GAAP EPS of $4.25 (+8% YoY) and non‑GAAP EPS of $5.96 (+18% YoY). Management cited record top‑line revenue and disciplined investments as drivers of EPS growth.
Read all positive updates
Company Guidance
Adobe raised full‑year FY26 financial targets, now guiding total revenue of $20.5–20.6 billion and non‑GAAP EPS of $24.35–24.45 (GAAP EPS $17.90–18.00), with Business Professionals & Consumers subscription revenue of $7.44–7.48 billion and Creative & Marketing Professionals subscription revenue of $18.21–18.27 billion (including roughly $280M from the SEMrush acquisition); it targets total Adobe ARR growth of 10.2% year‑over‑year off a $25.6B beginning book (Q2 ending ARR was $27.1B, +12.5% Y/Y, with SEMrush adding about $480M ARR). For Q3 FY26 Adobe guides revenue of $6.67–6.72 billion, BP&C subscription revenue of $1.87–1.89 billion, Creative & Marketing subscription revenue of $4.61–4.64 billion, GAAP EPS $4.40–4.45 and non‑GAAP EPS $6.05–6.10; FY assumptions include a ~45% non‑GAAP operating margin (Q3 ~44%), a GAAP tax rate ~22.5% (Q3 ~23%) and a non‑GAAP tax rate ~18%. Q2 exit metrics disclosed: total customer group subscription revenue $6.39B (+14% Y/Y), RPO $22.27B (+13% Y/Y), operating cash flow $2.17B, cash & short‑term investments $5.63B, ~8.5M shares repurchased in the quarter and roughly $27B remaining under buyback authorizations.Adobe Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
84
Very Positive
Cash Flow
78
Positive
| Breakdown | TTM | Nov 2025 | Nov 2024 | Nov 2023 | Nov 2022 | Nov 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 25.20B | 23.77B | 21.50B | 19.41B | 17.61B | 15.79B |
| Gross Profit | 22.46B | 21.06B | 19.15B | 17.05B | 15.44B | 13.92B |
| EBITDA | 9.94B | 9.75B | 7.96B | 7.78B | 7.05B | 6.67B |
| Net Income | 7.23B | 7.13B | 5.56B | 5.43B | 4.76B | 4.82B |
Balance Sheet | ||||||
| Total Assets | 29.93B | 29.50B | 30.23B | 29.78B | 27.16B | 27.24B |
| Cash, Cash Equivalents and Short-Term Investments | 5.63B | 6.59B | 7.89B | 7.84B | 6.10B | 5.80B |
| Total Debt | 7.07B | 6.65B | 6.06B | 4.08B | 4.63B | 4.67B |
| Total Liabilities | 18.41B | 17.87B | 16.13B | 13.26B | 13.11B | 12.44B |
| Stockholders Equity | 11.52B | 11.62B | 14.11B | 16.52B | 14.05B | 14.80B |
Cash Flow | ||||||
| Free Cash Flow | 10.63B | 9.85B | 7.82B | 6.94B | 7.40B | 6.89B |
| Operating Cash Flow | 10.83B | 10.03B | 8.06B | 7.30B | 7.84B | 7.22B |
| Investing Cash Flow | -1.72B | -1.19B | 149.00M | 776.00M | -570.00M | -3.54B |
| Financing Cash Flow | -11.45B | -11.06B | -7.72B | -5.18B | -6.83B | -4.30B |
Adobe Technical Analysis
Neutral
244.45
Price Trends
233.82
Negative
243.15
Negative
287.30
Negative
Market Momentum
-6.24
Negative
51.98
Neutral
85.03
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADBE, the sentiment is Neutral. The current price of 244.45 is above the 20-day moving average (MA) of 210.55, above the 50-day MA of 233.82, and below the 200-day MA of 287.30, indicating a neutral trend. The MACD of -6.24 indicates Negative momentum. The RSI at 51.98 is Neutral, neither overbought nor oversold. The STOCH value of 85.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $2.87T | 23.08 | 33.13% | 0.44% | 17.87% | 29.63% | |
76 Outperform | $86.68B | 12.66 | 62.39% | ― | 11.49% | 11.45% | |
72 Outperform | $84.69B | 98.79 | 2.64% | ― | 39.60% | -69.00% | |
69 Neutral | $43.79B | 30.78 | 49.42% | ― | 18.88% | 46.42% | |
64 Neutral | $12.94B | -18.89 | -21.33% | ― | 7.55% | -39.50% | |
62 Neutral | $11.14B | -7.55 | -101.33% | ― | 41.42% | -88.39% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
ADBE
Adobe
221.54
-160.70
-42.04%
ADSK
Autodesk
212.38
-102.53
-32.56%
MSFT
Microsoft
388.84
-103.84
-21.08%
SNPS
Synopsys
436.63
-114.88
-20.83%
U
Unity Software
29.66
0.26
0.88%
FIG
Figma, Inc. Class A
22.19
-99.81
-81.81%
Adobe Corporate Events
Business Operations and StrategyExecutive/Board ChangesStock BuybackFinancial Disclosures
Adobe posts record Q2 revenue and raises 2026 outlook
Positive
Jun 11, 2026
On June 11, 2026, Adobe reported record second-quarter FY2026 revenue of $6.62 billion, up 13% year on year, driven by strong AI-related demand and subscription growth across both business professionals and creative and marketing customers. The co...
Business Operations and StrategyStock BuybackShareholder Meetings
Adobe Announces $25 Billion Stock Repurchase Authorization
Positive
Apr 21, 2026
At its April 15, 2026 annual meeting, Adobe shareholders approved an amendment to the 2019 Equity Incentive Plan, lifting the share reserve by 12 million shares, and backed all four management proposals, including director elections, plan approval...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
Adobe Announces CEO Transition Amid Record AI-Driven Results
Positive
Mar 12, 2026
Adobe reported record first-quarter fiscal 2026 results for the period ended Feb. 27, 2026, including revenue of $6.40 billion, up 12% year over year, and AI-first annualized recurring revenue more than tripling, while subscription revenue grew 13...
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.