QualityDipStocks / Technology · Software
Adobe ADBE
In a deep dip: 30% below its 52-week high.
A quality company trading well below our fair value estimate.
- Fair value est.
- $646.48+158%
- Market Value
- $246.97price +1%
- Off 52-wk high
- −30%
- Risk vs market
- Lowbeta 0.23
5 bullish · 2 bearish See why
Key levels
Every level vs today’s $250.23
- 52-wk lowlowest close, 1 year$193.41−22.7%
- Market Valueavg paid since Sep 10$246.97−1.3%
- PriceFri Oct 30 close$250.23you are here
- 52-wk highhighest close, 1 year$357.53+42.9%
- Fair value est.base case$646.48+158.4%
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 10.5% ±2 points. Bear = 10.5% and 8.5%; bull = 8.5% and 12.5% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price is below even the bear case.
Cyclical / peak cash flow — treat with care
What the price implies To be worth today’s price, ADBE’s free cash flow would need to shrink about 6% a year for five years; our estimate uses 11%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much ADBE moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Has moved mostly independently of the market, but its own price swings are 3.2× the S&P 500’s (it moves on its own news).
- Beta vs S&P 500
- 0.23
- Volatility
- 41% vs 13% SPY
- Correlation SPY
- 0.07
- Correlation QQQ
- −0.06
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ValuationP/E of 13.6× is 64% below its own average of 37.6× at the last 3 fiscal year-ends.
ValuationFree-cash-flow yield of 10.7% (price / FCF 9.3×): $10.6B of free cash in the last 12 months.
ProfitabilityReturn on equity of 62% over the last 12 months, up 28 points in two years.
ProfitabilityReturn on invested capital of 67%, above the 9.5% discount rate our DCF uses.
ValuationOur DCF fair value estimate is $646.48, 158% above the price (cyclical or peak cash flow, so treat with care).
Top bearish points 2 of 5
Balance sheetDebt rose 71% to $6.2B from FY2023 to FY2025.
ValuationPrice / book of 8.4×, above the 7.1× median for the 149 Technology companies we cover.
Who’s talking about it
Notable investors, executives, analysts and public figures on Adobe in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in Software
All fundamentals
P/E 13.6 · FCF yield 10.7% · ROE 62%
Valuation
- P/E
- 13.6×3-yr-end avg 37.6× · Technology median 33.9×
- Price / FCF
- 9.3×
- FCF yield
- 10.7%
- EV / EBITDA
- 9.8×
- Price / sales
- 3.81×
- Price / book
- 8.41×
- Market cap
- $99.0Bprice × diluted shares
- Enterprise value
- $98.1B
Growth
- Revenue, 12 months
- $26.0B
- Sales growth, 12 months
- +12.0%vs the 12 months before
- Sales growth, 3 yrs
- +10.5%/yrfrom FY2022
- Diluted EPS, 12 months
- $17.91
- EPS growth, last FY
- +35.1%
- Net income, 12 months
- $7.3B
- Net income growth
- +5%12 months vs before
Profitability
- Gross margin
- 89.3%
- Operating margin
- 35.7%
- Net margin
- 28.0%
- FCF margin
- 40.8%
- Return on equity
- 62%
- Return on invested capital
- 67%
Balance sheet
- Cash & short-term inv.
- $5.6B
- Total debt
- $4.8B
- Net cash
- $873M
- Debt / equity
- 0.41×
- Interest coverage
- 35.7×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- $10.6B
- FCF growth, 12 months
- +10%
- Dividend yield
- 0%
- Payout ratio
- n/anot reported in its SEC filings
- Buybacks, 12 months
- $9.3B9.4% of market cap
- Share count, 1 year
- −6.7%diluted shares vs a year ago
- Stock-based comp
- $2.1B
Trailing 12 months to Aug 28, 2026; balance sheet at Aug 28, 2026. From Adobe’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $646.48 · MV $246.97 · FCF value $685.80
Cyclical / peak cash flow — treat with care
Assumes 10.5% growth for 5 years (revenue grew 10.5% a year FY22–FY25), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $26.78 a share (trailing 12 months to Aug 28, 2026), from the 10-Q filed Sep 22, 2026. Net cash $873M, not added.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. We watch it daily for our three reversal signal rules while it sits in a dip.
Momentum & 52-week range
RSI 50 · 5 days −5.2%
The business
FCF $10.6B · Sales +13%
- Free cash flow, 12 months$10.6B
- Free-cash-flow yield11.0%
- Free-cash-flow margin41%
- Gross margin89%
- Operating margin36%
- Return on invested capital40%
- Return on equity63%
- Sales growth (latest quarter vs year-ago quarter)+13%
- Net debt / EBITDA0.2×
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
Get a text when ADBE fires a reversal signal
One text when a published rule fires on ADBE or any of the 333 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.