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Adobe Inc. — Intrinsic Value & Fair Price

ADBE
NASDAQTechnologySoftware - ApplicationCIK 0000796343adobe.comAbout ADBE
Last close · Oct 16, 2026245.20−6.47 (−2.57%)
Market cap$95.4B
Model value · DCF · Perpetuity growth · 5y
340.54
Adobe closed at $245.20 — undervalued by 28% vs model.
240.57the model's range610.51

DCF · Perpetuity growth · 5y leads for a software company — positive operating income and three years of positive free cash flow. From a five-year discounted cash flow.

Other models
130.72 – 622.99
Wall St. target
257.50 5% below
Below model, 1y
22 of 22 days

Price and model value

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What the marks mean
Daily close

Research on ADBE

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How it is valued

Valued asSoftware
Moderate growth (~11% recent)High profitability (30% net margin)Moderately volatile earningsStrong FCF yield (10.3%)
What growth the price implies: the reverse DCF

Key figures

FY2025 · chosen for software companies
Price / sales
4.4×
Revenue growth
10.5%
Gross margin
88.6%
FCF margin
41.4%
Rule of 40
52.0%
Operating margin
36.6%
Full financials

Analyst actions

third-party, quoted
10-13HSBC · “Hold” from “Buy”downgrade
10-13HSBC · target267.00
10-12Wells Fargo · “Underweight” from “Overweight”downgrade
10-12Wells Fargo · target225.00
Ratings, targets and estimates

Comparable companies

by business, not by industry label

The weekly

One email a week across every stock we cover: 13F filings, insider trades, earnings and new research. It covers the whole market, not just ADBE. No account.

About Adobe

Adobe Inc. stands as a prominent global software provider, delivering a diverse range of solutions. Its operations are structured into three primary business divisions: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment empowers individuals, teams, and enterprises to generate, disseminate, and amplify various forms of content through its array of products and services, including the cloud-native Document Cloud platform. Central to this segment is Creative Cloud, its subscription-based flagship, granting access to a comprehensive suite of creative tools. This division caters to a diverse range of users, from professional content creators and marketers to educators, communicators, and general consumers. Adobe's Digital Experience division offers an integrated suite of applications and services designed to empower brands and businesses to craft, orchestrate, assess, and enhance customer journeys, from initial analytical insights to final commercial transactions. It serves a broad professional base including marketing teams, advertisers, agencies, data scientists, and senior executives. The Publishing and Advertising segment provides specialized offerings such as e-learning tools, technical documentation services, web conferencing solutions, advanced printing technologies, and its Advertising Cloud suite. Adobe engages directly with enterprise clients through its dedicated sales teams and regional offices. Individual end-users can access its offerings via app stores or its official website, adobe.com. Additionally, an extensive indirect channel supports distribution, encompassing partners such as distributors, value-added resellers, system integrators, software vendors, retailers, and original equipment manufacturers. Established in 1982, the company, initially named Adobe Systems Incorporated, rebranded as Adobe Inc. in October 2018. Its corporate headquarters are situated in San Jose, California.

CEO
Shantanu Narayen
Headquarters
San Jose, CA
Employees
31,360
IPO
1986-08-13
Full company profile

Model estimates for research reference only, not investment advice. Every model rests on assumptions that may not match what happens; the formulas are in how we value a stock.