adidas AG (ADS) AI Stock Analysis

• Market Cap: €29.68B
• Dividend Yield: 1.2%
• Average Volume (3M): 621.00K
• Price to Earnings (P/E): 24.7
• Beta (1Y): 1.14
• Revenue Growth: 10.95%
• EPS Growth: 400.40%
• Country: DE
• Employees: 46,045
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Apparel - Footwear & Accessories
• EPS (TTM): 2.03
• Shares Outstanding: 180,000,000
• 10 Day Avg. Volume: 1,069,411
• 30 Day Avg. Volume: 621,005
• 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: €247.88
• Price Target Upside: 49.10% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 17

• Rating: 56 Neutral
• Price Target: €171.00 ▲(2.86% 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 Resurgence

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

Sales and 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.

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 is a leading global sportswear manufacturer headquartered in Herzogenaurach, Germany. The company is renowned for designing, producing, and marketing a wide range of athletic and lifestyle products, including footwear, apparel, and accessories. Adidas operates in the sportswear, lifestyle, and fashion sectors, consistently innovating to enhance athletic performance and consumer experience. Through its eponymous brand and subsidiaries such as Reebok, Adidas maintains a strong presence in both casual and professional sports markets worldwide.

How the Company Makes Money

Adidas AG generates revenue primarily through the sale of its sportswear products, which include footwear, apparel, and accessories. The company's revenue model is built on direct-to-consumer sales through its online platforms and physical retail stores, as well as wholesale distribution to third-party retailers. Key revenue streams include performance-focused products designed for various sports such as running, soccer, and basketball, as well as lifestyle and fashion-oriented items. Adidas also benefits from strategic partnerships and sponsorships with high-profile athletes, sports teams, and events, which enhance its brand visibility and consumer engagement. Additionally, collaborations with designers and celebrities contribute to limited-edition releases and exclusive collections, further driving sales and brand appeal.

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: 166.25
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 166.25 is below the 20-day moving average (MA) of 195.49, below the 50-day MA of 201.90, and below the 200-day MA of 220.39, indicating a bearish trend. The MACD of -9.76 indicates Positive momentum. The RSI at 16.69 is Positive, neither overbought nor oversold. The STOCH value of 5.20 is Positive, 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 *	57 Neutral	HK$24.67B	3.83	-3.22%	5.89%	0.28%	-59.63%
ADS	56 Neutral	€29.68B	24.72	23.35%	1.20%	10.95%	400.40%
PMMAF	―	$3.07B	19.56	-4.30%	3.18%	―	―
0Q8F	―	€2.81B	13.36	15.00%	―	―	―
0QXN	―	$6.48B	23.99	10.57%	―	―	―
DHER	60 Neutral	€7.51B	―	-41.57%	―	23.67%	63.04%
YOU	47 Neutral	€1.07B	―	-47.97%	―	3.44%	5.93%