Adidas (ADDYY) AI Stock Analysis

• Market Cap: $34.69B
• Dividend Yield: 1.16%
• Average Volume (3M): 2.60K
• Price to Earnings (P/E): 25.4
• Beta (1Y): 0.72
• 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: 0
• 30 Day Avg. Volume: 2,596
• 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: 1.06
• Enterprise Value/Revenue: 1.48
• Enterprise Value/Gross Profit: 2.89
• Enterprise Value/Ebitda: 11.92
• 1Y Price Target: $183.05
• Price Target Upside: 89.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: $119.00 ▲(23.34% Upside)

Adidas's overall stock score is driven by strong financial performance and positive earnings call sentiment, highlighting record-breaking revenue and margin improvements. However, technical indicators suggest a short-term bearish trend, and the valuation indicates the stock may be overvalued. Cash flow challenges and regional market issues, particularly in North America, are areas to watch.

Positive Factors

Revenue Growth

Record-breaking revenue growth indicates strong market demand and effective sales strategies, enhancing long-term business prospects.

Margin Improvement

Improved margins reflect efficient cost management and pricing strategies, contributing to sustainable profitability.

E-commerce Expansion

Growth in e-commerce enhances direct-to-consumer sales, reducing reliance on traditional retail and increasing market reach.

Negative Factors

Cash Flow Challenges

Declining free cash flow can limit reinvestment opportunities and impact financial flexibility, posing a risk to long-term growth.

North America Market Challenges

Slower growth in North America highlights regional operational challenges, potentially affecting market share and revenue.

Tariff Impact

Tariff impacts increase costs and pressure margins, requiring strategic adjustments to maintain profitability in affected markets.

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

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.

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.

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.

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: 96.48
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 96.48 is below the 20-day moving average (MA) of 97.38, above the 50-day MA of 94.69, and below the 200-day MA of 107.70, indicating a neutral trend. The MACD of 0.35 indicates Positive momentum. The RSI at 49.49 is Neutral, neither overbought nor oversold. The STOCH value of 14.97 is Positive, 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	79 Outperform	$15.65B	15.92	43.31%	―	12.38%	18.43%
BIRK	77 Outperform	$8.11B	21.14	12.67%	―	18.86%	88.29%
ADDYY	71 Outperform	$34.69B	25.36	21.80%	1.16%	11.87%	191.75%
CROX	63 Neutral	$4.49B	28.23	11.82%	―	<0.01%	-77.31%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
NKE	54 Neutral	$97.59B	38.65	17.95%	2.81%	-5.06%	-47.51%