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Adidas (ADDYY)
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Adidas (ADDYY) AI Stock Analysis

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ADDYY

Adidas

(OTC:ADDYY)

Rating:66Neutral
Price Target:
$109.00
▲(12.61% Upside)
Adidas's overall score reflects its strong financial performance and positive earnings call insights, indicating a robust recovery and growth trajectory. However, technical analysis points to bearish trends, and valuation metrics suggest potential overvaluation. The risks from US tariffs and e-commerce sales decline further temper the outlook.

Adidas (ADDYY) vs. SPDR S&P 500 ETF (SPY)

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 makes money primarily through the sale of its sportswear and lifestyle products, which are distributed via its wholesale network, retail stores, and e-commerce platforms. Key revenue streams include footwear, which accounts for the largest share, followed by apparel and accessories. The company leverages strong brand partnerships with athletes, sports teams, and events to enhance its market presence and drive sales. Additionally, Adidas invests in marketing and innovation to maintain a competitive edge, focusing on sustainability and digital transformation to attract environmentally-conscious consumers.

Adidas Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q1-2025)
|
% Change Since: -15.02%|
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
Adidas demonstrated strong financial performance and growth across most markets, driven by effective inventory management and operational efficiency. However, challenges such as increased US tariffs and e-commerce sales decline present potential headwinds. While the company is confident in meeting its 2025 guidance, the impact of tariffs remains a significant uncertainty.
Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Adidas reported a 13% increase in currency-neutral net sales, and 17% when excluding YEEZY. Gross profit improved more than 52%, and EBIT reached €610 million, reflecting a 400 basis point improvement.
Geographical Sales Growth
All markets reported growth: North America up 13%, Europe 16%, Greater China 14%, and LatAm 27%. Adidas brand sales up 17% excluding YEEZY.
Inventory Management
Inventory up 15% to €5.1 billion, with a significant portion of fresh products, reflecting better planning and demand management.
Operating Leverage
Operating overheads grew only 3% despite a 30% currency-neutral growth, reflecting better operational efficiency.
Negative Updates
US Tariff Challenges
Adidas faces increased tariffs on imports to the US, which could impact profitability if duties remain or increase after the current 90-day suspension period.
E-commerce Downturn
E-commerce sales were down 3% due to the absence of YEEZY, although Adidas brand sales excluding YEEZY grew by 18%.
Potential Pricing Pressure
Adidas may need to adjust prices in the US market to offset increased tariff costs, which could affect consumer demand.
Company Guidance
During the adidas AG Q1 2025 Conference Call, the company reported strong financial performance, exceeding expectations with net sales growing 13% currency-neutral and 17% for the adidas brand excluding YEEZY. Gross profit rose over 52%, reflecting a 100 basis point improvement, and the operating profit reached €610 million, representing an almost 400 basis point improvement, nearing their 10% EBIT target. Regionally, North America sales grew 13% for the adidas brand, Europe by 16%, Greater China by 14%, Japan and Korea achieved growth despite challenges, and Latin America and emerging markets saw robust double-digit growth at 27% and 25% respectively. Footwear led category growth at 17%, with apparel nearly reaching double-digit growth, and accessories up 10%. The company remains focused on localizing strategy and maintaining momentum amid challenges such as U.S. tariffs, with expectations of continued double-digit growth excluding YEEZY and a confirmed EBIT guidance of €1.7 billion to €1.8 billion.

Adidas Financial Statement Overview

Summary
Adidas demonstrates a strong financial recovery with improved profitability margins and robust cash flow management. The company effectively manages debt while maintaining a balanced financial structure. However, there is a need to sustain cash flow momentum and strengthen its equity position for long-term health.
Income Statement
82
Very Positive
Adidas has demonstrated strong revenue growth of 13.75% from 2023 to TTM (Trailing-Twelve-Months) and a net profit margin improvement to 4.19% in TTM, indicating enhanced profitability. The gross profit margin remained robust at 51.0% in TTM, highlighting effective cost management. The EBIT margin of 6.61% and EBITDA margin of 11.51% in TTM further confirm operational efficiency. However, the company faced a challenging period in 2023 with a negative net income, but has since recovered well.
Balance Sheet
75
Positive
Adidas maintains a moderate debt-to-equity ratio of 0.97 in TTM, reflecting a balanced approach to leverage. The equity ratio stands at 28.44%, indicating a stable financial structure. Return on equity improved significantly to 17.89% in TTM, showcasing enhanced shareholder returns. Despite these strengths, there is room for improvement in equity growth and further reduction of liabilities to enhance financial stability.
Cash Flow
78
Positive
Adidas exhibits strong cash flow management with a free cash flow to net income ratio of 1.52 in TTM, demonstrating efficient conversion of earnings into cash. The operating cash flow to net income ratio of 2.05 in TTM further underlines robust cash generation capacity. However, the free cash flow decreased by 34.36% compared to the previous year, suggesting potential challenges in sustaining cash flow momentum.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue24.51B23.68B21.43B22.51B21.23B19.84B
Gross Profit12.55B12.03B10.18B10.64B10.77B9.85B
EBITDA2.99B2.51B785.00M1.75B3.11B1.98B
Net Income1.20B764.00M-75.00M254.00M1.49B432.00M
Balance Sheet
Total Assets19.50B20.66B18.02B20.30B22.14B21.05B
Cash, Cash Equivalents and Short-Term Investments1.43B2.48B1.48B966.00M3.94B4.24B
Total Debt5.47B5.59B5.56B6.46B5.33B5.89B
Total Liabilities13.94B14.79B13.10B14.95B14.30B14.36B
Stockholders Equity5.20B5.48B4.58B4.99B7.52B6.45B
Cash Flow
Free Cash Flow692.00M2.37B2.13B-1.24B2.52B1.04B
Operating Cash Flow1.23B2.91B2.55B-543.00M3.19B1.49B
Investing Cash Flow-342.00M-356.00M-450.00M495.00M-424.00M-115.00M
Financing Cash Flow-1.71B-1.56B-1.43B-2.96B-2.99B479.00M

Adidas Technical Analysis

Technical Analysis Sentiment
Negative
Last Price96.79
Price Trends
50DMA
116.14
Negative
100DMA
116.70
Negative
200DMA
120.10
Negative
Market Momentum
MACD
-6.41
Positive
RSI
22.19
Positive
STOCH
3.54
Positive
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 96.79 is below the 20-day moving average (MA) of 110.91, below the 50-day MA of 116.14, and below the 200-day MA of 120.10, indicating a bearish trend. The MACD of -6.41 indicates Positive momentum. The RSI at 22.19 is Positive, neither overbought nor oversold. The STOCH value of 3.54 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ADDYY.

Adidas Peers Comparison

Overall Rating
UnderperformOutperform
Sector (69)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
82
Outperform
$15.71B16.2443.58%15.43%24.20%
78
Outperform
$9.34B34.329.35%18.55%147.70%
77
Outperform
$109.85B34.3723.29%2.11%-9.70%-42.38%
72
Outperform
$9.43B15.1814.67%10.66%9.44%
70
Outperform
$5.72B6.4415.39%2.09%26.18%
69
Neutral
1.66B15.8923.44%6.31%7.82%-35.37%
66
Neutral
$34.61B26.1322.73%1.16%11.60%399.24%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ADDYY
Adidas
96.79
-20.01
-17.13%
CROX
Crocs
74.39
-57.36
-43.54%
DECK
Deckers Outdoor
101.89
-45.43
-30.84%
NKE
Nike
74.35
1.72
2.37%
SKX
Skechers USA
63.02
0.69
1.11%
BIRK
Birkenstock Holding plc
48.51
-8.80
-15.36%
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.Date of analysis: Jul 31, 2025