Adidas (ADDYY) AI Stock Analysis

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Adidas

(OTC:ADDYY)

Rating:73Outperform

Price Target:

$135.00

▲(17.88%Upside)

Adidas' overall stock score reflects strong financial recovery and growth, supported by efficient cash flow management and operational efficiency. While the earnings call was positive, indicating robust market performance, valuation concerns and technical indicators suggest caution. Potential risks include US tariff challenges and e-commerce downturn, impacting future growth.

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

Market Cap

$41.13B

Dividend Yield0.97%

Average Volume (3M)6.64K

Price to Earnings (P/E)37.6

Beta (1Y)0.68

Revenue Growth11.69%

EPS Growth632.93%

CountryUS

Employees46,045

SectorConsumer Cyclical

Sector Strength58

IndustryApparel - Footwear & Accessories

Share Statistics

EPS (TTM)1.39

Shares Outstanding360,000,000

10 Day Avg. Volume0

30 Day Avg. Volume6,641

Financial Highlights & Ratios

PEG Ratio-0.56

Price to Book (P/B)2.32

Price to Sales (P/S)0.00

P/FCF Ratio-9.36

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$146.63

Price Target Upside28.04% 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 primarily through the sale of its sportswear and lifestyle products. The company's key revenue streams include its wholesale business, which involves selling products to retailers worldwide, and its direct-to-consumer business, comprising sales through company-owned retail stores and e-commerce platforms. Adidas also benefits from strategic collaborations and partnerships with high-profile athletes, sports teams, and fashion designers, which enhance brand visibility and drive sales. Sponsorship deals and licensing agreements further contribute to its earnings by expanding its brand presence across different markets.

Adidas Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q1-2025)

% Change Since: -6.83%|

Next Earnings Date:Jul 30, 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 shows a strong financial recovery with improved profitability margins and robust cash flow management. The company has managed its debt levels well, maintaining a balanced financial structure. However, sustaining cash flow momentum and strengthening its equity position could enhance long-term financial health.

Income Statement

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	24.38B	23.68B	21.43B	22.51B	21.23B	19.84B
Gross Profit	12.43B	12.03B	10.18B	10.64B	10.77B	9.85B
EBITDA	2.81B	2.51B	785.00M	1.75B	3.11B	1.98B
Net Income	1.02B	764.00M	-75.00M	254.00M	1.49B	432.00M
Balance Sheet
Total Assets	20.09B	20.66B	18.02B	20.30B	22.14B	21.05B
Cash, Cash Equivalents and Short-Term Investments	2.11B	2.48B	1.48B	966.00M	3.94B	4.24B
Total Debt	5.57B	5.59B	5.56B	6.46B	5.33B	5.89B
Total Liabilities	14.00B	14.79B	13.10B	14.95B	14.30B	14.36B
Stockholders Equity	5.71B	5.48B	4.58B	4.99B	7.52B	6.45B
Cash Flow
Free Cash Flow	1.56B	2.37B	2.13B	-1.24B	2.52B	1.04B
Operating Cash Flow	2.09B	2.91B	2.55B	-543.00M	3.19B	1.49B
Investing Cash Flow	-235.00M	-356.00M	-450.00M	495.00M	-424.00M	-115.00M
Financing Cash Flow	-1.18B	-1.56B	-1.43B	-2.96B	-2.99B	479.00M

Adidas Technical Analysis

Technical Analysis Sentiment

Negative

Last Price114.52

Price Trends

50DMA

118.98

Negative

100DMA

121.01

Negative

200DMA

121.70

Negative

Market Momentum

MACD

-1.84

Positive

RSI

40.47

Neutral

STOCH

27.39

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 114.52 is below the 20-day moving average (MA) of 119.19, below the 50-day MA of 118.98, and below the 200-day MA of 121.70, indicating a bearish trend. The MACD of -1.84 indicates Positive momentum. The RSI at 40.47 is Neutral, neither overbought nor oversold. The STOCH value of 27.39 is Neutral, 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 (67)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DECK	79 Outperform	$15.01B	16.14	41.82%	―	16.22%	29.52%
BIRK	77 Outperform	$9.79B	35.07	9.35%	―	18.55%	147.70%
CROX	74 Outperform	$5.46B	6.07	53.70%	―	2.09%	26.18%
ADDYY	73 Outperform	$41.13B	37.56	19.21%	0.97%	11.69%	632.93%
SKX	72 Outperform	$9.39B	15.10	14.67%	―	10.66%	9.44%
NKE	71 Outperform	$89.71B	20.22	31.93%	2.60%	-7.11%	-12.12%
Sector *	67 Neutral	¥249.37B	12.89	6.57%	2.82%	5.08%	-11.19%

* Consumer Cyclical Sector Average

Performance Comparison

ADDYY

Adidas

114.52

-3.97

-3.35%

CROX

Crocs

98.64

-49.61

-33.46%

DECK

Deckers Outdoor

101.04

-65.61

-39.37%

NKE

Nike

60.83

-31.38

-34.03%

SKX

Skechers USA

62.83

-7.01

-10.04%

BIRK

Birkenstock Holding plc

49.50

-4.80

-8.84%

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: Jun 06, 2025