adidas AG (ADS) AI Stock Analysis

• Market Cap: €34.51B
• Dividend Yield: 1.02%
• Average Volume (3M): 399.51K
• Price to Earnings (P/E): 33.8
• Beta (1Y): 1.05
• Revenue Growth: 12.80%
• EPS Growth: 662.68%
• Country: DE
• Employees: 46,045
• Sector: Consumer Cyclical
• Sector Strength: 57
• Industry: Apparel - Footwear & Accessories
• EPS (TTM): 2.44
• Shares Outstanding: 180,000,000
• 10 Day Avg. Volume: 384,375
• 30 Day Avg. Volume: 399,509
• PEG Ratio: -1.12
• Price to Book (P/B): 4.68
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -18.87
• 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: €258.19
• Price Target Upside: 32.13% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 22

• Rating: 58 Neutral
• Price Target: €201.00 ▲(2.87%Upside)

Adidas AG's overall stock score is primarily influenced by strong financial performance, which is somewhat offset by bearish technical indicators. The company's high P/E ratio suggests overvaluation, further impacting the score. Despite strong cash flow, the low RSI indicates potential for price recovery if market conditions improve.

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.

Demand and Sales Growth

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

New Product Pipeline

Adidas has a robust new product pipeline and expects to outperform conservative 2025 guidance, creating opportunities for share gains in all markets.

Negative Factors

Production 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.

Supply Chain Limitations

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 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 sale of athletic and casual footwear, apparel, and accessories. Its primary revenue streams include wholesale distribution to retail partners, direct-to-consumer sales via owned retail stores and e-commerce platforms, and licensing agreements. The company's extensive global presence and strong brand equity enable it to capitalize on growing demand for sportswear and lifestyle products. Strategic partnerships and collaborations with athletes, sports teams, and fashion designers further bolster its market position and drive sales. Additionally, adidas invests heavily in marketing and innovation to maintain its competitive edge and appeal to a diverse customer base worldwide.

adidas AG Financial Statement Overview

Summary

Adidas AG exhibits a strong financial position with solid growth and profitability metrics. The company manages costs well, resulting in improved margins and cash flow generation. While the balance sheet is solid, focusing on equity growth and profitability could further enhance 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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
24.38B	23.68B	21.43B	22.51B	21.23B	19.84B
	Gross Profit
12.43B	12.03B	10.18B	10.64B	10.77B	9.85B
	EBIT
1.59B	1.34B	268.00M	669.00M	1.99B	751.00M
	EBITDA
2.81B	2.51B	785.00M	1.75B	3.11B	1.98B
	Net Income Common Stockholders
1.02B	764.00M	-75.00M	254.00M	1.49B	432.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.43B	2.48B	1.48B	966.00M	3.94B	4.24B
	Total Assets
20.09B	20.66B	18.02B	20.30B	22.14B	21.05B
	Total Debt
5.57B	5.59B	5.56B	6.46B	5.33B	5.89B
	Net Debt
4.14B	3.46B	4.13B	5.66B	1.50B	1.90B
	Total Liabilities
14.00B	14.79B	13.10B	14.95B	14.30B	14.36B
	Stockholders Equity
5.71B	5.48B	4.58B	4.99B	7.52B	6.45B
Cash Flow		Free Cash Flow
1.56B	2.37B	2.13B	-1.24B	2.52B	1.04B
	Operating Cash Flow
2.09B	2.91B	2.55B	-543.00M	3.19B	1.49B
	Investing Cash Flow
-235.00M	-356.00M	-450.00M	495.00M	-424.00M	-115.00M
	Financing Cash Flow
-1.18B	-1.56B	-1.43B	-2.96B	-2.99B	479.00M

adidas AG Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 195.40
• 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 195.4 is below the 20-day moving average (MA) of 209.79, below the 50-day MA of 208.82, and below the 200-day MA of 224.71, indicating a bearish trend. The MACD of -4.84 indicates Positive momentum. The RSI at 31.63 is Neutral, neither overbought nor oversold. The STOCH value of 5.76 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 *	62 Neutral	$6.76B	11.07	2.80%	6.34%	2.68%	-24.87%
ADS	58 Neutral	€34.51B	33.77	19.28%	1.02%	12.80%	662.68%
PMMAF		$3.72B	17.62	7.25%	2.77%	―	―
0Q8F		€2.58B	12.32	15.00%	3.73%	―	―
0QXN		€6.89B	25.56	10.57%	―	―	―
DHER	51 Neutral	€6.45B	―	-41.57%	―	23.67%	63.04%
YOU		€1.15B	―	-47.97%	―	―	―