Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 11.82%, lower than industry average of 12.66%.

Growth Trajectory

Profitability

In the growth phase company makes 33.04% profit on every dollar of sales, higher than industry average of 23.53%.

Profitability Trajectory

Risk Profile

Investors expect at least 10.07% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)
Return on Invested Capital (%)

Financial Health Overview

Enterprise Value
108.87B USD
Equity Value
108.02B USD
FCF Yield
60.97%
Average ROIC
53.62%
Cost of Capital
9.61%
P/E Ratio
22.11x
Financial MetricMost Recent 12 months (USD)Previous Year (USD)
Revenues22.60B USD21.50B USD
Operating Income or EBIT8.55B USD8.10B USD
Interest Expense231M USD169M USD
Book Value Of Equity11.45B USD14.11B USD
Book Value Of Debt6.56B USD6.06B USD
Cash and Marketable Securities5.71B USD7.89B USD
Number of Shares Outstanding427M--
Minority interests0 USD0 USD
Current Stock Price354.06 USD--
Effective Tax Rate20.00%--
Marginal Tax Rate25.00%--

Performance vs Industry

Revenue Growth
-7.57%
5.09%Company
vs
12.66%Industry
Below Industry
Operating Margin
+14.29%
37.81%Company
vs
23.52%Industry
Above Industry
Adobe Inc. demonstrates superior operational efficiency with margins above industry average, indicating effective cost management.

Terminal Value Analysis

Growth Rate
4.59%
Cost of Capital
8.83%
Return on Capital
8.83%
Reinvestment Rate
52.09%
Terminal value represents 54% of total enterprise value, based on 4.59% perpetual growth and 8.83% discount rate.

Equity Value Breakdown

ComponentValueType
Present Value (Terminal Value) 58.26B USD Add
Present Value (Cash Flow Over Next 10 Years) 50.61B USD Add
Value of Operating Assets 108.87B USD Sub-total
Debt 6.56B USD Subtract
Minority Interests — Subtract
Cash 5.71B USD Add
Value of Equity 108.02B USD Sub-total
Number of Shares 427.00M shares Divisor
Estimated Value per Share (Fair Value) 252.98 USD Total
Current Market Price 354.06 USD Reference

Financial Projections

Total FCF Present Value
50.61B USD
Avg Revenue Growth
8.22%
Avg Operating Margin
31.98%
Avg ROIC
53.62%
Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Terminal Year
REVENUE
Revenue24.72B USD27.64B USD30.91B USD34.56B USD38.65B USD42.66B USD46.47B USD49.95B USD52.97B USD55.41B USD57.96B USD
Growth Rate 9.39% 11.82% 11.82% 11.82% 11.82% 10.37% 8.93% 7.48% 6.04% 4.59% 4.59%
PROFITABILITY
Operating Income9.34B USD9.57B USD10.21B USD10.87B USD11.54B USD12.74B USD13.87B USD14.91B USD15.81B USD16.54B USD17.30B USD
Operating Margin 37.81% 34.63% 33.04% 31.45% 29.86% 29.86% 29.86% 29.86% 29.86% 29.86% 29.86%
EBIT (1-tax)7.47B USD7.65B USD8.17B USD8.69B USD9.23B USD10.06B USD10.82B USD11.48B USD12.02B USD12.41B USD12.98B USD
CASH FLOW
Reinvestment727.99M USD814.05M USD910.28M USD1.01B USD999.15M USD1.89B USD1.73B USD1.50B USD1.21B USD1.26B USD6.76B USD
Free Cash Flow6.75B USD6.84B USD7.26B USD7.68B USD8.23B USD8.16B USD9.09B USD9.98B USD10.80B USD11.14B USD6.21B USD
Terminal Value--------------------147.01B USD
Present Value6.13B USD5.65B USD5.44B USD5.23B USD5.09B USD4.60B USD4.67B USD4.69B USD4.66B USD4.41B USD—
EFFICIENCY
ROIC 60.82% 58.80% 59.04% 58.96% 58.56% 60.02% 57.99% 56.30% 54.88% 53.68% 8.83%
Cost of Capital 10.07% 10.07% 10.07% 10.07% 10.07% 9.82% 9.57% 9.32% 9.07% 8.83% 8.83%
Sales/Capital 4.01x 4.01x 4.01x 4.01x 4.01x 2.00x 2.00x 2.00x 2.00x 2.00x —

Profitability & Efficiency

Operating Margin (%)
ROIC (%)

Value Creation Analysis

ROIC (%)
Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow ($B)
Reinvestment ($B)