adidas AG (ADS) AI Stock Analysis

• Market Cap: €37.08B
• Dividend Yield: 0.96%
• Average Volume (3M): 424.96K
• Price to Earnings (P/E): 36.3
• Beta (1Y): 1.06
• Revenue Growth: 12.80%
• EPS Growth: 662.68%
• Country: DE
• Employees: 46,045
• Sector: Consumer Cyclical
• Sector Strength: 65
• Industry: Apparel - Footwear & Accessories
• EPS (TTM): 2.44
• Shares Outstanding: 180,000,000
• 10 Day Avg. Volume: 347,473
• 30 Day Avg. Volume: 424,964
• PEG Ratio: 1.08
• Price to Book (P/B): 6.49
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 23.83
• 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: €259.10
• Price Target Upside: 25.47% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 21

• Rating: 71 Outperform
• Price Target: €228.00 ▲(10.41%Upside)

Adidas AG's overall score is driven by its robust financial performance and stable cash flow, which are key strengths. However, the technical analysis indicates caution due to mixed signals, and the current valuation suggests the stock may be overvalued relative to peers. Absent significant earnings call insights, the focus remains on financial and technical aspects.

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.

Negative Factors

Supply chain risk

US tariffs on countries other than China carry strong risk as Adidas cannot reorganize strongly its supply-chain that has already been de-risked to China.

Tariff impact

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 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 a strong financial position with solid revenue growth, effective cost management, and improved operational efficiency. While profitability metrics show room for enhancement, positive cash flow trends reinforce the company's financial stability.

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

adidas AG Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 206.50
• 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 206.5 is above the 20-day moving average (MA) of 204.25, below the 50-day MA of 209.57, and below the 200-day MA of 223.14, indicating a neutral trend. The MACD of 0.51 indicates Negative momentum. The RSI at 49.89 is Neutral, neither overbought nor oversold. The STOCH value of 28.55 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
ADS	71 Outperform	€37.08B	36.29	19.28%	0.96%	12.80%	662.68%
Sector *	62 Neutral	$16.79B	10.79	-7.01%	3.04%	1.73%	-25.15%
PMMAF	―	$3.87B	18.42	7.25%	2.66%	―	―
0Q8F	―	€2.85B	13.53	15.00%	3.39%	―	―
0QXN	―	€7.11B	26.51	10.57%	―	―	―
YOU	53 Neutral	€1.15B	―	-47.97%	―	3.44%	5.93%
DHER	49 Neutral	€6.99B	―	-41.57%	―	23.67%	63.04%