Adobe Systems Stock Analysis (NASDAQ:ADBE)

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$127.7 $0.83 (0.65%) ADBE stock closing price Mar 24, 2017 (Closing)
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Adobe Systems
Updated on : Mar 24, 2017
previous close
ADBE 127.7 (0%)
NASDAQ 5828.7 (0%)
Closing Price On: Mar 24, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Computer-Software
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2017-Q1
$billion
%
YOY GROWTH
Compared to the industry
Operating Profit
Operating Margin:
26.9%
Sector Average:
2.7%
5 Quarter Net Profit
Net Margins
2017-Q1
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
1.88B
Debt/Equity Ratio:
 0.25
Compared to the industry
Cash Flow
Operating cash flow:
$730.4M
Net Income:
$398.5M
PROS      CONS
Recent Growth
Operating Margins
Net Margins
Cash Flow
ROIC
ROE
High Debt Burden
PE Valuation
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
ADBE PS :
10.3
Industry PS :
2.6
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
26.5%
Return on Equity:
17.9%
Free Cash Flow Margin:
41.6%
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Adobe Systems Analysis Video

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View Adobe Systems stock analysis video. This is our ADBE analyst opinion covering the buy and sell arguments for ADBE stock.

Adobe Systems Incorporated Stock Rating (3.7/5)

Our Adobe Systems stock opinion is based on fundamentals of the company. This Adobe Systems stock analysis is based on latest Q1 earnings for 2017. The stock price analysis takes into account a company's valuation metrics.

Should you buy ADBE stock?

  • Adobe Systems's revenue growth came in at 21.6% in 2017 Q1.
  • Adobe Systems had a healthy average operating margin of 26.9% over the last 4 quarters.
  • LTM Net margins were good at 21.3% for Adobe Systems.
  • The company has an operating cash flow which is 1.8 times the net income. We see this as a positive signal.
  • Adobe Systems has an attractive ROIC (Return on Invested Capital) of 26.5%
  • The LTM ROE of 17.9% for Adobe Systems is attractive.
  • The company has a good Free Cash Flow (FCF) margin of 41.6%.

Should you sell ADBE stock?

  • Adobe Systems has a debt/equity ratio of  0.25, which is worse than the average in the Computer and Technology sector.
  • Trading at a PE ratio of 46.3, ADBE stock is overvalued in comparison to industry average multiple of 25.7.
  • The company is trading at a price to sales multiple of 10.3, which is overvalued in comparison to the Computer-Software industry average multiple of 2.6.

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