adidas AG (ADS) AI Stock Analysis

• Market Cap: €29.94B
• Dividend Yield: 1.19%
• Average Volume (3M): 657.19K
• Price to Earnings (P/E): 25.1
• Beta (1Y): 1.16
• Revenue Growth: 10.95%
• EPS Growth: 400.40%
• Country: DE
• Employees: 46,045
• Sector: Consumer Cyclical
• Sector Strength: 81
• Industry: Apparel - Footwear & Accessories
• EPS (TTM): 2.03
• Shares Outstanding: 180,000,000
• 10 Day Avg. Volume: 425,037
• 30 Day Avg. Volume: 657,194
• PEG Ratio: -0.05
• Price to Book (P/B): 7.72
• Price to Sales (P/S): 1.79
• P/FCF Ratio: 17.84
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €245.06
• Price Target Upside: 46.13% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 17

• Rating: 56 Neutral
• Price Target: €171.00 ▲(1.97% Upside)

Adidas AG's overall stock score is primarily influenced by its solid financial performance, despite some concerns over cash flow growth and debt levels. Technical analysis indicates bearish momentum, which negatively impacts the score. The valuation suggests the stock may be overvalued, further weighing on the overall score. The absence of earnings call and corporate events data means these factors do not influence the score.

Positive Factors

Brand Strength

The broader resurgence of Adidas's brand suggests an underpinning of support and pricing power for the brand to weather multiple scenarios.

Financial Performance

The EBIT for 1Q25 exceeded expectations by €64m, accounting for 35% of the mid-point FY25 guide.

Sales Growth

Adidas achieved double-digit growth across all regions and channels.

Negative Factors

Cost Pressures

Increased production costs from the latest US tariff hikes are expected to pressure profit margins and necessitate potential price increases that could deter consumer demand.

Market Expectations

Consensus EPS estimates and EBIT margin expansion assumptions for FY26 are far too optimistic based on the current run rates of the business.

Tariff Risks

Adidas remains a lower margin risk target under US tariff policy which could lead to a sizable cut to consensus EPS estimates across the sector.

adidas AG 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 AG generates revenue through the design, manufacturing, and marketing of sportswear and lifestyle products. The company's primary revenue streams include sales of footwear, apparel, and accessories through both wholesale and direct-to-consumer channels, such as branded retail stores and the online marketplace. Significant partnerships with athletes, sports teams, and events enhance brand visibility and drive sales. Additionally, adidas benefits from licensing agreements that allow third-party manufacturers to produce and distribute products under its brand, further contributing to its earnings. The company also invests in marketing and sponsorships to strengthen its brand presence and reach a broader customer base.

adidas AG Financial Statement Overview

Summary

Adidas AG demonstrates strong financial performance with solid revenue growth and effective cost management. Margins, including EBIT and EBITDA, have improved, indicating operational efficiency. The balance sheet is stable with manageable leverage and a strong return on equity. Cash flow performance is robust, highlighting effective cash conversion and generation.

Income Statement

Adidas AG has demonstrated strong revenue growth, with a TTM revenue of €24.38 billion, a 3.6% increase from the previous year. The gross profit margin stands at 51.0% TTM, reflecting effective cost management. However, the net profit margin is relatively modest at 4.2% TTM, indicating room for improvement in profitability. The EBIT and EBITDA margins improved to 6.4% and 11.5% TTM, respectively, highlighting operational efficiency gains.

Balance Sheet

The company's financial stability is solid, with a debt-to-equity ratio of 0.98 TTM, indicating manageable leverage. Return on equity improved to 17.9% TTM, showcasing effective utilization of equity capital. The equity ratio is at 28.4% TTM, suggesting a balanced capital structure. However, improvements in equity growth could further enhance financial resilience.

Cash Flow

Adidas AG's cash flow performance is strong, with a stable operating cash flow of €2.09 billion TTM. The free cash flow to net income ratio is robust at 1.52 TTM, indicating effective cash generation relative to profits. The operating cash flow to net income ratio is 2.05 TTM, showcasing effective conversion of earnings into cash flow. Slight fluctuations in free cash flow growth suggest potential for optimizing capital expenditures.

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 AG Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 167.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:ADS, the sentiment is Negative. The current price of 167.7 is below the 20-day moving average (MA) of 167.81, below the 50-day MA of 188.75, and below the 200-day MA of 216.67, indicating a bearish trend. The MACD of -6.11 indicates Negative momentum. The RSI at 35.56 is Neutral, neither overbought nor oversold. The STOCH value of 50.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:ADS.

adidas AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$17.75B	12.51	-5.49%	3.06%	1.43%	-14.10%
ADS	56 Neutral	€29.94B	25.12	23.35%	1.19%	10.95%	400.40%
PMMAF	―	$3.52B	19.56	-4.30%	2.88%	―	―
0Q8F	―	€2.93B	13.26	16.69%	―	―	―
0QXN	―	€6.41B	23.68	10.35%	―	―	―
DHER	55 Neutral	€7.22B	―	-41.57%	―	23.67%	63.04%
YOU	45 Neutral	€1.07B	―	-47.97%	―	3.44%	5.93%