Adobe Inc. (ADBE) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Adobe Inc.

Updated on October 25, 2026 · accounts published on September 10, 2026

A highly profitable software business with margins well above its own history and little debt

Adobe trades at a P/E of 14.0, 72 % below its ten-year median of 50.5, with a 36 % operating margin over the last 12 months.

• Is Adobe expensive or cheap? Adobe's P/E is 72 % below its ten-year median and has been lower only 4 % of the time in the last decade.
• How is the business doing? Operating margin reached 36 % over the last 12 months, well above its 29 % average for fiscal 2014-2025.
• How strong is the balance sheet? Net debt was just $0.74 per share in fiscal 2025, 0.3 % of the current price and 0.1× EBITDA.
• What to expect from the next earnings? Analysts expect EPS of $6.32 for the quarter Adobe reports on December 9, 2026, after 8 straight beats.
• Does Adobe grow with real cash or by diluting shareholders? Free cash flow was 41 % of revenue in fiscal 2025, while stock-based pay took 8.2 %, under the 10 % tech line.

Is Adobe expensive or cheap?

Over the last 12 months Adobe trades at a P/E of 14.0, against a ten-year median of 50.5 and a decade range of 10.9 to 85.8. It sits 56 % below the median P/E of its sector, 32.0 across 314 companies. EV/EBITDA of 9.8× is about a third of its five-fiscal-year average of 29.1×, and the free cash flow yield is close to 12 %. The market has marked the stock down hard: it fell 26 % over the last 12 months and trades 30 % below its 52-week high of $357.53. These multiples price Adobe as a company with little growth ahead.

How is the business doing?

Over the last 12 months revenue rose 11 % and EPS rose 35 %, so profit is growing more than three times as fast as sales. The operating margin of 36 % compares with an average of 29 % across fiscal 2014-2025 and 37 % in fiscal 2025, which keeps Adobe near the top of its own record. Net margin is 28 % and ROE reaches 63 %. ROIC of 36.8 % is 28.6 points above the sector median of 8.2 %, and it has stayed above 10 % in each of the last ten fiscal years, a sign of durable returns rather than a single good year.

How strong is the balance sheet?

In fiscal 2025 Adobe carried $16.22 of debt per share against $15.48 of cash, so its borrowings are almost fully covered by the cash on hand. Debt to equity is 0.57 over the last 12 months, and an Altman Z of 8.5 sits firmly in the safe zone. The soft spot is short-term liquidity: a current ratio of 0.77 means current liabilities exceed current assets, which the company's cash generation comfortably offsets. A Piotroski score of 7 out of 9 shows most of the quality tests passing over the last 12 months.

What to expect from the next earnings?

On September 10, 2026 Adobe reported EPS of $6.13 against $6.08 expected, a beat of 0.8 % and its eighth in the last eight quarters. The beats have been small, so the streak reflects consistency more than large surprises. The 2026 EPS consensus held at $24.48 over the last 30 days among 23 analysts, and revenue estimates barely moved. Of the 64 analysts covering the company, 30 rate it a buy, 28 a hold and 6 a sell, a split that mirrors a stock down 26 % in a year while its profits keep rising.

Does Adobe grow with real cash or by diluting shareholders?

In technology, generic metrics fall short: what matters is growth, pricing power and how much of the profit is paid to staff in shares. Adobe's gross margin of 89 % in fiscal 2025 clears the 70 % healthy level for software, a mark of pricing power. Free cash flow equal to 41 % of revenue doubles the 20 % healthy threshold, and stock-based compensation at 8.2 % of revenue stays below the 10 % healthy line. Its Rule of 40 score of 56 beats the elite mark of 40. The borderline item is growth: revenue per share rose 14.2 % a year over fiscal 2022-2025, just short of the 15 % healthy level.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.