Adidas (ADDYY) AI Stock Analysis

• Market Cap: $31.46B
• Dividend Yield: 1.16%
• Average Volume (3M): 16.41K
• Price to Earnings (P/E): 23.2
• Beta (1Y): 0.74
• Revenue Growth: 11.87%
• EPS Growth: 191.75%
• Country: US
• Employees: 46,045
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Footwear & Accessories
• EPS (TTM): 1.50
• Shares Outstanding: 360,000,000
• 10 Day Avg. Volume: 5,444
• 30 Day Avg. Volume: 16,415
• PEG Ratio: -0.05
• Price to Book (P/B): 7.67
• Price to Sales (P/S): 1.77
• P/FCF Ratio: 17.72
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 1.26
• Enterprise Value/Gross Profit: 2.45
• Enterprise Value/Ebitda: 10.09
• 1Y Price Target: $213.12
• Price Target Upside: 140.22% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 62 Neutral
• Price Target: $90.00 ▲(1.44% Upside)

The score is driven primarily by improving profitability and a constructive earnings outlook (record sales, margin expansion, and supportive guidance). Offsetting this are weak recent cash generation and a mixed technical picture (below longer-term moving averages), while valuation appears fair-to-slightly expensive with only a modest dividend yield.

Positive Factors

Strong Revenue Growth

Sustained top-line momentum with record quarterly sales and double-digit currency-neutral growth indicates broad demand across markets. Durable revenue expansion supports operating leverage, funds reinvestment in product and DTC channels, and underpins medium-term margin recovery.

Improving Profitability

Gross margin expansion to the low-50% range and positive EBIT performance signal structural improvement in product mix, pricing power, and cost control. Higher sustainable gross margins increase resilience to cost shocks and provide room for reinvestment in marketing and innovation.

Direct-to-Consumer & Brand Strength

A diversified DTC model (retail + e-commerce) and strong brand collaborations create higher-margin sales channels and better customer data. Durable channel mix supports margin sustainability, faster new-product scale, and stronger pricing/loyalty advantages versus wholesale-dependent peers.

Negative Factors

Weak Cash Generation

A marked decline in trailing cash from operations and free cash flow undermines financial flexibility. Weak cash conversion versus net income limits capacity for capex, dividends, or opportunistic buybacks and raises reliance on financing if earnings fluctuate.

Elevated Inventories

A sizeable inventory build ties up working capital and raises markdown and obsolescence risk, pressuring gross margins if sell-through slows. Elevated stock levels can persist over quarters, requiring disciplined promotions or write-downs that erode durable profitability.

Tariff & North America Headwinds

Significant tariff exposure and execution problems in North America create a structural earnings headwind. Trade costs compress margins and complicate pricing strategies; persistent regional operational issues can slow market share gains and reduce long-term profit stability.

Adidas Business Overview & Revenue Model

Company Description

adidas AG, together with its subsidiaries, designs, develops, distributes, and markets athletic and sports lifestyle products worldwide. It offers footwear; apparel; and accessories and gear, such as bags and balls under the adidas brand. It sells its products through approximately 2,200 own-retail stores; mono-branded franchise stores and shop-in-shops; and wholesale and its e-commerce channels. The company was formerly known as adidas-Salomon AG and changed its name to adidas AG in June 2006. adidas AG was founded in 1920 and is headquartered in Herzogenaurach, Germany.

How the Company Makes Money

Adidas generates revenue through multiple key streams, primarily from the sale of athletic footwear and apparel. The company operates a direct-to-consumer model through its retail stores, e-commerce platforms, and online marketplaces, which allows for higher margins compared to traditional wholesale distribution. Additionally, Adidas benefits from licensing agreements and collaborations with various designers and celebrities, enhancing brand visibility and appeal. The company also generates income from partnerships with sports teams and organizations, which often include co-branded merchandise, sponsorship deals, and promotional events. Seasonal product launches, limited edition releases, and collaborations with influential figures contribute to strong sales, especially in the competitive athleisure market.

Adidas Financial Statement Overview

Summary

Income statement recovery is strong (revenue and margins improving, profitability back to positive), and the balance sheet is improving with manageable leverage. However, cash flow is a clear weakness: TTM operating cash flow and free cash flow are materially lower, with weak cash conversion versus net income.

Income Statement

Profitability has rebounded meaningfully: TTM (Trailing-Twelve-Months) revenue is up sharply and margins improved versus 2023, with net income turning solidly positive again. Gross margin remains strong and stable around the low-50% range in the last two periods. The key weakness is that net margins are still modest versus earlier peak levels (notably 2021), highlighting that the recovery is still in progress and not yet back to prior profitability highs.

Balance Sheet

Leverage looks manageable but not conservative: debt is roughly in line with equity in TTM (Trailing-Twelve-Months) and has improved from the more levered posture seen in 2022–2023. Equity has also rebuilt, supporting a stronger capital base. The main risk is that leverage remains elevated relative to 2021 levels, leaving less cushion if earnings soften, even though returns on equity have recently strengthened alongside the earnings recovery.

Cash Flow

Cash generation is the biggest pressure point: TTM (Trailing-Twelve-Months) operating cash flow and free cash flow are materially lower than recent annual levels, and free cash flow has declined sharply versus the prior year. Free cash flow covers only a modest portion of net income in TTM (Trailing-Twelve-Months), suggesting weaker cash conversion recently. A positive is that the company has demonstrated an ability to produce strong cash flow in prior years, but the latest TTM trend is a clear step down.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	24.70B	23.68B	21.43B	22.51B	21.23B	19.84B
Gross Profit	12.69B	12.03B	10.18B	10.64B	10.77B	9.85B
EBITDA	3.08B	2.51B	785.00M	1.75B	3.11B	1.98B
Net Income	1.22B	764.00M	-75.00M	254.00M	1.49B	432.00M
Balance Sheet
Total Assets	20.15B	20.66B	18.02B	20.30B	22.14B	21.05B
Cash, Cash Equivalents and Short-Term Investments	1.70B	2.48B	1.48B	966.00M	3.94B	4.24B
Total Debt	5.43B	5.59B	5.56B	6.46B	5.33B	5.89B
Total Liabilities	16.53B	14.79B	13.10B	14.95B	14.30B	14.36B
Stockholders Equity	5.70B	5.48B	4.58B	4.99B	7.52B	6.45B
Cash Flow
Free Cash Flow	379.00M	2.37B	2.13B	-1.24B	2.52B	1.04B
Operating Cash Flow	911.00M	2.91B	2.55B	-543.00M	3.19B	1.49B
Investing Cash Flow	-342.00M	-356.00M	-450.00M	495.00M	-424.00M	-115.00M
Financing Cash Flow	-1.27B	-1.56B	-1.43B	-2.96B	-2.99B	479.00M

Adidas Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 88.72
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADDYY, the sentiment is Negative. The current price of 88.72 is below the 20-day moving average (MA) of 91.59, below the 50-day MA of 93.51, and below the 200-day MA of 105.94, indicating a bearish trend. The MACD of -2.41 indicates Positive momentum. The RSI at 42.15 is Neutral, neither overbought nor oversold. The STOCH value of 58.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ADDYY.

Adidas Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DECK	80 Outperform	$17.39B	16.43	39.69%	―	12.38%	18.43%
BIRK	77 Outperform	$6.94B	17.82	12.67%	―	18.86%	88.29%
CROX	63 Neutral	$4.36B	28.33	11.82%	―	<0.01%	-77.31%
ADDYY	62 Neutral	$31.46B	23.20	21.78%	1.16%	11.87%	191.75%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
NKE	54 Neutral	$91.50B	36.24	17.95%	2.81%	-5.06%	-47.51%