Adobe Systems Incorporated (ADBE)
NASDAQ:ADBE
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Adobe
(NASDAQ:ADBE)
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Rating:75Outperform
Price Target:
$280.00
▲(17.00% Upside)
Action:ReiteratedDate:03/14/26
Score is driven by Adobe’s strong profitability and cash flow generation, supported by constructive earnings-call guidance and AI/ARR momentum. The main offsets are clearly bearish price action versus key moving averages and execution/timing risk from the stock-business decline and freemium-to-paid monetization lag, despite the stock appearing reasonably valued on P/E.
Positive Factors
Cash generation & FCF conversion
Sustained, high free cash flow with near‑1:1 conversion to net income gives durable financial flexibility. This funds R&D, AI investments, buybacks and strategic M&A without stressing the balance sheet, supporting long‑term reinvestment and shareholder returns.
Negative Factors
Top‑line deceleration
A material slowdown in revenue growth reduces operating leverage benefits and increases dependence on margin expansion or buybacks to sustain returns. Persistently slower top‑line makes future growth contingent on successful new monetization and enterprise expansion.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation & FCF conversion
Sustained, high free cash flow with near‑1:1 conversion to net income gives durable financial flexibility. This funds R&D, AI investments, buybacks and strategic M&A without stressing the balance sheet, supporting long‑term reinvestment and shareholder returns.
Read all positive factors
Adobe (ADBE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$96.73B
Dividend YieldN/A
Average Volume (3M)5.69M
Price to Earnings (P/E)14.2
Beta (1Y)0.97
Revenue Growth10.53%
EPS Growth34.24%
CountryUS
Employees30,709
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)6.06
Shares Outstanding404,200,000
10 Day Avg. Volume3,697,424
30 Day Avg. Volume5,685,325
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 Cap1.01
Enterprise Value/Revenue4.00
Enterprise Value/Gross Profit4.49
Enterprise Value/Ebitda9.91
Forecast
1Y Price Target
$319.38Price Target Upside33.46% Upside
Rating ConsensusHold
Number of Analyst Covering26
EPS Forecast (FY)23.53
Revenue Forecast (FY)$26.06B
Adobe Business Overview & Revenue Model
Company Description
Adobe Inc. operates as a diversified software company worldwide. It operates through three segments: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment offers products, services, and solutions that enable ...
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 Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where Adobe is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where Adobe is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyAdobe Earnings Call Summary
Earnings Call Date:Mar 12, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jun 11, 2026
Earnings Call Sentiment Positive
The call highlights strong top-line growth, high profitability, rapid adoption and monetization of AI-first products, sizable MAU gains, robust enterprise traction and record operating cash flow. These positives were tempered by a faster-than-expected decline in the traditional stock business, and a near-term ARR dampening as large freemium AI initiatives scale and convert users to paid customers over time. Management reaffirmed FY targets and provided Q2 guidance, signaling confidence despite short-term transition effects.Positive Updates
Strong Q1 Revenue and EPS
Q1 revenue of $6.40 billion, up 12% year-over-year as reported (11% in constant currency). GAAP EPS $4.60 (up 11% YoY) and non-GAAP EPS $6.06 (up 19% YoY).
Negative Updates
Faster-than-Expected Decline in Traditional Stock Business
Standalone stock business experienced a steeper decline than anticipated; estimated at roughly a $450 million book of business. Management noted this shift is occurring faster than planned and is dampening near-term ARR.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Q1 Revenue and EPS
Q1 revenue of $6.40 billion, up 12% year-over-year as reported (11% in constant currency). GAAP EPS $4.60 (up 11% YoY) and non-GAAP EPS $6.06 (up 19% YoY).
Read all positive updates
Company Guidance
Adobe guided Q2 FY2026 revenue of $6.43–6.48 billion, Business Professionals & Consumers subscription revenue of $1.80–1.82 billion and Creative & Marketing Professionals subscription revenue of $4.41–4.44 billion, with GAAP EPS of $4.35–4.40 and non‑GAAP EPS of $5.80–5.85, and expects non‑GAAP operating margin of ~44.5% and a non‑GAAP tax rate of ~18%; the company reaffirmed its FY'26 targets (guidance assumes current macro conditions and excludes Semrush, which is expected to close in Q2) and reiterated an FY'26 total ARR growth target of 10.2%—anchored by Q1 context of $6.40B revenue, Q1 GAAP EPS $4.60/non‑GAAP EPS $6.06, total ending ARR $26.06B (up 10.9% YoY), RPO $22.22B (up 13% YoY) and strong subscription momentum.Adobe Financial Statement Overview
Summary
Income Statement
90
Very Positive
Balance Sheet
86
Very Positive
Cash Flow
92
Very Positive
| Breakdown | TTM | Nov 2025 | Nov 2024 | Nov 2023 | Nov 2022 | Nov 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 24.45B | 23.77B | 21.50B | 19.41B | 17.61B | 15.79B |
| Gross Profit | 21.79B | 21.06B | 19.15B | 17.05B | 15.44B | 13.92B |
| EBITDA | 9.88B | 9.75B | 7.96B | 7.78B | 7.05B | 6.67B |
| Net Income | 7.21B | 7.13B | 5.56B | 5.43B | 4.76B | 4.82B |
Balance Sheet | ||||||
| Total Assets | 29.70B | 29.50B | 30.23B | 29.78B | 27.16B | 27.24B |
| Cash, Cash Equivalents and Short-Term Investments | 6.89B | 6.59B | 7.89B | 7.84B | 6.10B | 5.80B |
| Total Debt | 6.66B | 6.65B | 6.06B | 4.08B | 4.63B | 4.67B |
| Total Liabilities | 18.27B | 17.87B | 16.13B | 13.26B | 13.11B | 12.44B |
| Stockholders Equity | 11.43B | 11.62B | 14.11B | 16.52B | 14.05B | 14.80B |
Cash Flow | ||||||
| Free Cash Flow | 10.32B | 9.85B | 7.82B | 6.94B | 7.40B | 6.89B |
| Operating Cash Flow | 10.51B | 10.03B | 8.06B | 7.30B | 7.84B | 7.22B |
| Investing Cash Flow | -229.00M | -1.19B | 149.00M | 776.00M | -570.00M | -3.54B |
| Financing Cash Flow | -10.76B | -11.06B | -7.72B | -5.18B | -6.83B | -4.30B |
Adobe Technical Analysis
Negative
239.31
Price Trends
261.22
Negative
296.06
Negative
325.69
Negative
Market Momentum
-7.29
Negative
37.83
Neutral
59.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADBE, the sentiment is Negative. The current price of 239.31 is below the 20-day moving average (MA) of 246.54, below the 50-day MA of 261.22, and below the 200-day MA of 325.69, indicating a bearish trend. The MACD of -7.29 indicates Negative momentum. The RSI at 37.83 is Neutral, neither overbought nor oversold. The STOCH value of 59.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
75 Outperform | $96.73B | 14.24 | 62.31% | ― | 10.53% | 34.24% | |
74 Outperform | $2.78T | 23.36 | 33.61% | 0.71% | 16.67% | 28.60% | |
67 Neutral | $50.78B | 47.92 | 39.89% | ― | 15.62% | 2.59% | |
66 Neutral | $78.57B | 287.80 | 4.57% | ― | 12.62% | -45.12% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
56 Neutral | $9.63B | -46.16 | -12.57% | ― | -8.23% | 48.57% | |
56 Neutral | $10.51B | -15.27 | -92.27% | ― | ― | ― |
* Technology Sector Average
ADBE
Adobe
239.31
-125.33
-34.37%
ADSK
Autodesk
240.65
-22.88
-8.68%
MSFT
Microsoft
374.33
-14.08
-3.62%
SNPS
Synopsys
410.16
-18.54
-4.32%
U
Unity Software
22.24
2.25
11.26%
FIG
Figma, Inc. Class A
20.15
-101.85
-83.48%
Adobe Corporate Events
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...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Adobe Adopts 2026 Performance-Based Executive Compensation Programs
Positive
Jan 27, 2026
On January 26, 2026, Adobe’s board-level Executive Compensation Committee approved a 2026 Performance Share Program that ties executive equity awards to a three-year relative total shareholder return versus NASDAQ-100 peers and annual Net Ne...
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.