adidas AG (ADS) AI Stock Analysis

• Market Cap: €23.84B
• Dividend Yield: 1.22%
• Average Volume (3M): 481.99K
• Price to Earnings (P/E): 93.2
• Beta (1Y): 1.12
• Revenue Growth: 9.64%
• EPS Growth: 187.42%
• Country: DE
• Employees: 46,045
• Sector: General
• Sector Strength: N/A
• Industry: Apparel - Footwear & Accessories
• EPS (TTM): 0.42
• Shares Outstanding: 180,000,000
• 10 Day Avg. Volume: 411,656
• 30 Day Avg. Volume: 481,994
• PEG Ratio: 0.30
• Price to Book (P/B): 5.23
• Price to Sales (P/S): 1.22
• P/FCF Ratio: 110.17
• 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: €212.61
• Price Target Upside: 59.26% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): 9.5
• Revenue Forecast (FY): €26.27B

• Rating: 56 Neutral
• Price Target: €146.00 ▲(9.36% Upside)
• Action: Reiterated Date: 03/05/26
• Date: Action: Reiterated 03/05/26

The score is driven primarily by mixed financials: a strong earnings and margin rebound and a more stable balance sheet are offset by a sharp deterioration in operating/free cash flow. Technicals add pressure with the stock trading below all key moving averages and bearish momentum readings, while valuation is only moderately supportive due to a mid-range P/E and modest dividend yield.

Positive Factors

Strong revenue momentum

A ~45% TTM revenue increase signals durable top-line recovery and market share gains across channels. Sustained sales growth supports operating leverage, funds reinvestment in product and DTC growth, and improves the firm's ability to execute medium‑term strategic initiatives.

Margin and profitability recovery

Material margin improvement to historically high gross margins and rising operating/net margins indicates better product mix, pricing and cost control. Higher sustainable margins enhance cash generation potential and provide buffer to invest in innovation and marketing over the coming quarters.

Brand strength and capital actions

A EUR 1B buyback reflects management conviction in the durability of brand-driven demand and disciplined capital allocation. Returning capital while reducing share count can sustainably boost shareholder returns and signals confidence in medium‑term free cash generation and strategic positioning.

Negative Factors

Weak cash conversion

Sharp decline in operating and free cash flow versus prior year shows earnings are not converting to cash as before. That limits financial flexibility for capex, inventory investment and buybacks, and raises medium‑term funding and quality‑of‑earnings concerns if cash conversion does not normalize.

Meaningful leverage

Debt roughly in line with equity reduces balance‑sheet cushion versus low‑leverage peers. With leverage still meaningful, the company has less flexibility to absorb shocks, pursue large M&A or sustain heavy buybacks in a downturn, increasing refinancing and interest‑rate sensitivity risk.

Earnings quality and volatility

A volatile earnings track record and past net loss undermine predictability of future profits. Combined with weaker cash conversion, this reduces confidence in recurring cash flows, complicates long‑term planning and increases the probability that cyclical downturns will pressure margins and capital allocation.

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 products across various channels, including wholesale, direct-to-consumer (DTC), and e-commerce. The wholesale segment involves selling products to retailers, while the DTC segment includes sales through adidas-owned stores and online platforms. Key revenue streams include the sales of footwear, which accounts for a significant portion of total revenue, followed by apparel and accessories. The company also benefits from licensing agreements and collaborations with other brands and designers, which enhance its product offerings and market reach. Strategic partnerships with athletes and sports teams further bolster the brand's visibility and sales. Additionally, adidas invests in marketing campaigns and sponsorships to drive consumer engagement and brand loyalty, contributing to its overall earnings.

adidas AG Financial Statement Overview

Summary

Income statement momentum is strong (revenue up sharply and margins recovering), and the balance sheet is improving with solid ROE, but leverage remains meaningful. The biggest drag is cash flow: operating and free cash flow fell sharply versus 2024 and FCF covers less than half of net income, raising near-term cash-conversion and quality-of-earnings concerns.

Income Statement

Results show a clear earnings recovery and strong top-line momentum. In TTM (Trailing-Twelve-Months), revenue rose sharply (about +45% vs prior year), with profitability improving to ~7.8% operating margin and ~4.9% net margin (up from ~5.7% and ~3.2% in 2024). Gross margin has also strengthened to ~51% in TTM, supporting the rebound. Offsetting this, profitability is still well below the 2021 peak (net margin ~7.0%), and the multi-year path has been volatile (including a net loss in 2023), which lowers the quality/stability of the earnings profile.

Balance Sheet

Leverage is moderate but not low: TTM debt is ~€5.6B against ~€5.8B equity (debt roughly in line with equity). The balance sheet has improved versus 2022–2024 when debt exceeded equity, and equity has rebuilt from the 2023 level. Returns on equity are strong in TTM (~22%) and improved versus 2024 (~14%), reflecting the earnings rebound. The main risk is limited balance-sheet cushion given leverage remains meaningful and past profitability swings suggest the capital structure could come under pressure in a downturn.

Cash Flow

Cash generation weakened materially in TTM (Trailing-Twelve-Months): operating cash flow is ~€0.7B and free cash flow ~€0.24B, far below 2024 levels (operating cash flow ~€2.9B; free cash flow ~€2.37B). Free cash flow declined sharply versus the prior period (negative growth), and free cash flow covers less than half of net income in TTM, indicating earnings are not translating into cash as well as they did historically. A positive is that free cash flow remains positive in TTM, but the step-down from 2023–2024 raises near-term quality-of-earnings and funding flexibility concerns.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	24.81B	23.68B	21.43B	22.51B	21.23B
Gross Profit	11.69B	12.03B	10.18B	10.64B	10.77B
EBITDA	3.09B	2.51B	785.00M	1.75B	3.11B
Net Income	1.34B	764.00M	-75.00M	254.00M	1.49B
Balance Sheet
Total Assets	20.26B	20.66B	18.02B	20.30B	22.14B
Cash, Cash Equivalents and Short-Term Investments	1.64B	2.48B	1.48B	966.00M	3.94B
Total Debt	5.55B	5.59B	5.56B	6.46B	5.33B
Total Liabilities	14.14B	14.79B	13.10B	14.95B	14.30B
Stockholders Equity	5.78B	5.48B	4.58B	4.99B	7.52B
Cash Flow
Free Cash Flow	274.00M	2.37B	2.05B	-1.17B	2.52B
Operating Cash Flow	751.00M	2.91B	2.55B	-479.00M	3.19B
Investing Cash Flow	-404.00M	-356.00M	-451.00M	495.00M	-424.00M
Financing Cash Flow	-1.10B	-1.56B	-1.43B	-2.96B	-2.99B

adidas AG Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 133.50
• 50DMA: Negative
• 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 DE:ADS, the sentiment is Negative. The current price of 133.5 is below the 20-day moving average (MA) of 145.71, below the 50-day MA of 150.37, and below the 200-day MA of 171.37, indicating a bearish trend. The MACD of -4.97 indicates Positive momentum. The RSI at 31.06 is Neutral, neither overbought nor oversold. The STOCH value of 16.49 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
BOSS	67 Neutral	€2.53B	10.00	17.17%	3.86%	0.09%	4.22%
ZAL	64 Neutral	€5.68B	30.68	7.72%	―	12.06%	18.20%
ADS	56 Neutral	€23.84B	93.22	22.32%	1.22%	9.64%	187.42%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
DHER	50 Neutral	€4.59B	-4.29	-23.41%	―	23.23%	76.05%
PUM	42 Neutral	$2.94B	-5.10	-30.05%	2.83%	-2.90%	-211.60%