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Adidas (ADDYY)
OTHER OTC:ADDYY
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Adidas
(OTC:ADDYY)
Select Model
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Rating:71Outperform
Price Target:
$121.00
▲(9.18% Upside)
Adidas's strong financial performance, particularly in revenue growth and profitability, is a significant positive factor. Technical analysis supports a bullish short-term outlook, although valuation concerns due to a high P/E ratio suggest potential overvaluation. The absence of earnings call and corporate events data means these factors did not influence the score.
Adidas (ADDYY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$39.90B
Dividend Yield1.16%
Average Volume (3M)2.52K
Price to Earnings (P/E)30.5
Beta (1Y)0.72
Revenue Growth11.60%
EPS Growth399.24%
CountryUS
Employees46,045
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Footwear & Accessories
Share Statistics
EPS (TTM)1.17
Shares Outstanding360,000,000
10 Day Avg. Volume4,905
30 Day Avg. Volume2,522
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.19
Enterprise Value/Revenue1.94
Enterprise Value/Gross Profit3.78
Enterprise Value/Ebitda15.88
Forecast
1Y Price Target
$135.66Price Target Upside22.40% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Adidas Business Overview & Revenue Model
Company Descriptionadidas 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 MoneyAdidas generates revenue through several key streams, primarily from the sale of its footwear, apparel, and accessories. The company operates a mix of wholesale and direct-to-consumer channels, with a significant portion of its earnings coming from selling products through its own retail stores and e-commerce platforms. Additionally, partnerships with professional sports teams, athletes, and influencers enhance brand visibility and drive sales. The company also benefits from licensing agreements, allowing it to earn revenue through the manufacturing and sale of branded products by third-party companies. Seasonal product launches and limited-edition collaborations create hype and exclusivity, contributing to increased sales. Furthermore, Adidas invests in sustainability initiatives, which appeal to environmentally conscious consumers, potentially boosting its market share and profitability.
Adidas Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q1-2025)
| % Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Positive
Adidas reported a strong financial performance for Q1 2025, with significant sales growth and improved profitability. The company achieved notable successes in product launches and regional market growth, particularly in emerging markets and Latin America. However, uncertainty surrounding U.S. tariffs poses a potential challenge to maintaining margins, and the decrease in e-commerce sales highlights the impact of lost YEEZY sales. Overall, the positive highlights significantly outweigh the lowlights, indicating a robust start to the fiscal year.Q1-2025 Updates
Positive Updates
Strong Q1 2025 Financial Performance
Adidas reported a currency-neutral net sales increase of 13%, with the Adidas brand specifically seeing a 17% increase when excluding YEEZY. Gross profit margins improved by 90 basis points to over 52%. Operating profit (EBIT) reached €610 million, a nearly 400 basis point improvement, translating to a 9.9% operating margin.
Regional Growth Success
All markets showed growth, with North America up 13% for the Adidas brand, Europe up 16%, Greater China up 14%, and Latin America up 27%. Emerging markets also grew by 25%.
Apparel and Footwear Performance
Footwear sales grew by 17%, apparel approached double-digit growth, and accessories increased by 10%. The division is seeing increased consumer demand, particularly in lifestyle and performance categories.
Successful Product Launches and Brand Heat
Adidas experienced strong consumer demand for new products, including collaborations and limited editions. The brand's visibility in sports and lifestyle markets has increased, contributing to a successful quarter.
Negative Updates
U.S. Tariff Challenges
Adidas faces uncertainty from U.S. tariffs, which have been increased and could impact margins. The company is monitoring the situation and may need to adjust pricing strategies.
E-commerce Decrease
E-commerce sales decreased by 3% overall, although they rose by 18% when excluding YEEZY. The decline is attributed to the absence of €150 million in YEEZY sales from the previous year.
Company Guidance
In the adidas AG Q1 2025 Conference Call, the company reported strong financial metrics, highlighted by a 13% increase in net sales currency-neutral, and a noteworthy 17% growth excluding YEEZY. The gross profit margin improved over 52%, with the adidas brand showing a 160 basis point increase. Operating profit reached €610 million, nearly a 10% EBIT margin, reflecting a 400 basis point enhancement. The call emphasized regional growth, with Europe and Greater China up 16% and 14% respectively, while Latin America surged by 27%. North America saw a 13% rise in the adidas brand despite the absence of YEEZY sales. The company also spotlighted its strategic focus on local market execution, performance in key categories, and the ongoing impact of U.S. tariffs, maintaining its full-year guidance despite these challenges.Adidas Financial Statement Overview
Summary
Adidas demonstrates strong revenue growth and profitability improvements, particularly in the TTM period. The balance sheet reflects a stable financial position with manageable leverage. However, cash flow challenges, particularly in free cash flow, highlight areas for improvement. Overall, the company is on a positive trajectory but should focus on enhancing cash flow generation.Income Statement
Adidas has shown a strong revenue growth rate of 53.3% in the TTM period, indicating robust sales performance. The gross profit margin remains healthy at 51.2%, reflecting efficient production and pricing strategies. Net profit margin improved to 4.9%, showcasing enhanced profitability. However, the EBIT and EBITDA margins, while improved, suggest room for operational efficiency gains.78
Positive
Balance Sheet
The debt-to-equity ratio is slightly above 1, indicating a balanced but slightly leveraged position. Return on equity has improved to 22.3%, demonstrating strong profitability relative to shareholder equity. The equity ratio is stable, suggesting a solid asset base. However, the leverage level should be monitored to avoid potential risks.72
Positive
Cash Flow
Free cash flow has decreased significantly by 55.5% in the TTM period, which is a concern. The operating cash flow to net income ratio is relatively low, indicating potential cash flow constraints. The free cash flow to net income ratio is moderate, suggesting some ability to generate cash from operations.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 24.51B | 23.68B | 21.43B | 22.51B | 21.23B | 19.84B |
| Gross Profit | 12.55B | 12.03B | 10.18B | 10.64B | 10.77B | 9.85B |
| EBITDA | 2.99B | 2.51B | 785.00M | 1.75B | 3.11B | 1.98B |
| Net Income | 1.20B | 764.00M | -75.00M | 254.00M | 1.49B | 432.00M |
Balance Sheet | ||||||
| Total Assets | 19.50B | 20.66B | 18.02B | 20.30B | 22.14B | 21.05B |
| Cash, Cash Equivalents and Short-Term Investments | 1.43B | 2.48B | 1.48B | 966.00M | 3.94B | 4.24B |
| Total Debt | 5.47B | 5.59B | 5.56B | 6.46B | 5.33B | 5.89B |
| Total Liabilities | 13.94B | 14.79B | 13.10B | 14.95B | 14.30B | 14.36B |
| Stockholders Equity | 5.20B | 5.48B | 4.58B | 4.99B | 7.52B | 6.45B |
Cash Flow | ||||||
| Free Cash Flow | 692.00M | 2.37B | 2.13B | -1.24B | 2.52B | 1.04B |
| Operating Cash Flow | 1.23B | 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 | -1.71B | -1.56B | -1.43B | -2.96B | -2.99B | 479.00M |
Adidas Technical Analysis
Positive
110.83
Price Trends
102.25
Positive
110.84
Negative
116.61
Negative
Market Momentum
1.94
Negative
60.38
Neutral
85.75
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADDYY, the sentiment is Positive. The current price of 110.83 is above the 20-day moving average (MA) of 107.35, above the 50-day MA of 102.25, and below the 200-day MA of 116.61, indicating a neutral trend. The MACD of 1.94 indicates Negative momentum. The RSI at 60.38 is Neutral, neither overbought nor oversold. The STOCH value of 85.75 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ADDYY.
Adidas Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $8.13B | 24.58 | 11.36% | ― | 18.66% | 183.98% | |
77 Outperform | ― | ― | ― | ― | 12.11% | 17.08% | |
71 Outperform | $39.90B | 30.51 | 22.73% | 1.16% | 11.60% | 399.24% | |
71 Outperform | $15.07B | 15.18 | 43.58% | ― | 15.43% | 24.20% | |
68 Neutral | $4.43B | 21.59 | 15.39% | ― | 2.04% | -71.52% | |
66 Neutral | $101.86B | 35.32 | 21.12% | 2.35% | -7.07% | -44.29% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
ADDYY
Adidas
110.83
-16.20
-12.75%
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80.39
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SKX
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63.13
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BIRK
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43.51
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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.