AnalystScope equity researchCurrent company view

ADBE

Adobe Inc.

Information Technology / Software Application / San Jose, CA

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AnalystScope signal

Buy

Scheduled quote

$235

Base fair value

$270

Bear / base / bull

$221 / $270 / $304

Upside / downside

+15.1 upside

Confidence

High

Research updated Apr 9, 2026

Daily scheduled refresh as of Jul 21, 2026, 6:05 AM UTC. Fresh through Jul 22, 2026, 6:05 AM UTC.

Informational research only. Not personalized investment advice.

Investment summary

Current view and thesis

Adobe still looks like a high-quality software compounder with strong cash generation, and the current setup now screens as a more credible Buy after the multiple reset.

Fair value $270 vs. current $235 (+15.1 upside). Current base fair value is $270 versus $235, implying +15.1 upside.

Key drivers

Recurring subscription revenue and strong renewal behavior still anchor the growth and cash-generation base.

Document Cloud and enterprise workflow adoption broaden the valuation support beyond creative-seat expansion alone.

A lower entry multiple now gives more room for solid execution to show up in fair-value support.

Key risks

Faster competitive pressure from AI-native creation tools could narrow pricing or seat growth durability.

Enterprise seat expansion could remain choppy if budget scrutiny slows workflow upgrades.

If AI monetization disappoints, the market may resist giving Adobe a stronger re-rating.

What would change the view

Clearer evidence that AI products are sustaining higher net expansion would strengthen conviction.

A more persistent slowdown in enterprise seat growth would reduce confidence in the current base case.

If margin durability breaks while the multiple rerates higher, the Buy view would need revisiting.

Valuation

Price, range, and method support

Base case $270 / +15.1 upside / high confidence

Price vs fair value

+15.0%

Model-implied return

Scheduled quote

$235

Fair value

$270

Valuation method stack

Weighted fair value $270

Published method weights

DCF (Base)

$277 | 45%

NTM P/E Multiple

$266 | 35%

EV/EBITDA Cross-check

$262 | 20%

Case / method	Value	Weight / support
DCF (Base)	$277	45%
NTM P/E Multiple	$266	35%
EV/EBITDA Cross-check	$262	20%
Bear case	$221	Supportive
Base case	$270	Supportive
Bull case	$304	Mixed

Fundamental analysis

Reported evidence and normalized model base

Normalized annual basis: FY2025

Download reported financials CSV Download normalized financials CSV

Normalized figures are AnalystScope's annual valuation model base.

Normalized metric	Latest value	Growth / margin context
Revenue	$23.8B	+10.7% YoY
Operating income	$8.4B	35.3% margin
Net income	$7.0B	EPS proxy $17.25
Free cash flow	$9.1B	38.2% margin
EBITDA	$8.9B	37.4% margin
Net cash / (debt)	$4.8B	+20.2% of revenue

Metric	Reported	AnalystScope normalized	Basis note
Revenue (TTM)	$23.8B	$23.8B	Model revenue smooths enterprise seat timing and keeps the base on durable document and creative demand rather than one quarter of bookings noise.
Operating Margin	36.6%	35.3%	Margin input reduces temporary product-launch and go-to-market timing distortion while preserving Adobe's structural software economics.
FCF (TTM)	$9.9B	$9.1B	FCF input adjusts for working-capital timing and avoids over-reading unusually favorable billings conversion.
Net Cash / (Debt)	$2.2B	$4.8B	Balance-sheet treatment retains a conservative net-cash view without assuming all liquidity is immediately distributable.

Fundamental snapshot

FY2025

Normalized annual model base

Revenue

+10.7% YoY

$23.8B

Op. margin

+0.4% pts

35.3%

FCF margin

+1.0% pts

38.2%

Revenue + margin trend

Annual normalized model-base history.

Revenue

2023

2024

2025

Operating margin

2023

2024

2025

AnalystScope annual model-base statements in USD across FY2023 | FY2024 | FY2025.

Income statement

Line item	FY2023	FY2024	FY2025
Revenue	$19.4B	$21.5B	$23.8B
Gross Profit	$17.1B	$19.0B	$21.1B
Operating Income	$6.7B	$7.5B	$8.4B
EBITDA	$7.2B	$8.0B	$8.9B
Net Income	$5.2B	$6.1B	$7.0B

Balance sheet

Line item	FY2023	FY2024	FY2025
Cash & Investments	$7.5B	$8.2B	$8.8B
Total Debt	$4.1B	$3.9B	$4.0B
Net Cash / (Debt)	$3.4B	$4.3B	$4.8B
Total Assets	$31.0B	$33.0B	$35.0B
Total Liabilities	$15.0B	$15.0B	$15.0B
Shareholders' Equity	$16.0B	$18.0B	$20.0B

Cash flow

Line item	FY2023	FY2024	FY2025
Operating Cash Flow	$7.5B	$8.4B	$9.5B
Depreciation & Amortization	$500.0M	$500.0M	$500.0M
Capital Expenditures	($300.0M)	($400.0M)	($400.0M)
Free Cash Flow	$7.2B	$8.0B	$9.1B

Model assumptions

Base-case inputs and sensitivity

Published AnalystScope assumptions; private edits do not change this base case.

Revenue CAGR (5Y)

9.0%

+/- 1.0% => +/-$12/sh

Why this level: This is AnalystScope's base-case growth assumption, not a guarantee. It sits below the latest FY model-base revenue pace (2025.0%), so the model does not extend current strength too far into the outer years. Current company context: Recurring subscription revenue and strong renewal behavior still anchor the growth and cash-generation base.

Terminal Growth

2.8%

+/- 0.5% => +/-$9/sh

Why this level: This is AnalystScope's mature long-run growth assumption, not a perpetual hypergrowth claim. At 2.8%, it sits well below the 9.0% five-year revenue CAGR, so the model steps down from the explicit forecast period to a steadier long-run pace. For Adobe Inc., that means a durable franchise can keep compounding after year five without assuming today's faster growth profile lasts indefinitely.

WACC

8.8%

+/- 0.5% => -$11/sh

Why this level: This is AnalystScope's base-case cost-of-capital judgment, not a precise CAPM output. It reflects the current rates backdrop, equity risk premium, and the company's balance-sheet posture. Net cash supports product and platform investment

Operating Margin (Year 5)

36.5%

+/- 100 bps => +/-$8/sh

Why this level: This is AnalystScope's base-case margin view, not a promise of straight-line expansion. It keeps year-five margins close to today's model-base operating margin (35.3%), which implies the current margin structure is broadly durable. Margin input reduces temporary product-launch and go-to-market timing distortion while preserving Adobe's structural software economics.

Sensitivity drivers

Revenue CAGR (5Y)

9.0%

+/- 1.0% => +/-$12/sh

Terminal Growth

2.8%

+/- 0.5% => +/-$9/sh

WACC

8.8%

+/- 0.5% => -$11/sh

Operating Margin (Year 5)

36.5%

+/- 100 bps => +/-$8/sh

Confidence

High

Method outputs are tightly grouped at +5.6% dispersion.

Why the model view could be wrong

Faster competitive pressure from AI-native creation tools could narrow pricing or seat growth durability.

Enterprise seat expansion could remain choppy if budget scrutiny slows workflow upgrades.

If AI monetization disappoints, the market may resist giving Adobe a stronger re-rating.

Private analysis

Test your own assumptions in Scenario Builder

Private scenarios remain separate from AnalystScope's published base case.

Open Scenario Builder

Private workspace

Scenario Builder

Private scenario sandbox

This is a private modelling layer, not the public AnalystScope base case or printable snapshot. It keeps the public base case as the anchor, applies bounded changes to the four core valuation inputs, and updates your scenario fair-value estimate immediately.

Saved scenarios currently stay local to this browser for ADBE. Base-case rationale remains in the public assumptions section above. Your scenario output reprices the published valuation methods from projected operating anchors when those anchors are available, while keeping market-multiple and capital-structure assumptions anchored to the AnalystScope framework.

Editable assumptions

Adjust your scenario inputs within the displayed plausible range for this company. The workbench stays anchored to the public AnalystScope base case.

This is a bounded scenario tool, not a free-form spreadsheet. Values outside the displayed range snap back to the nearest allowed value when you leave the field.

Matches the published AnalystScope base case.

Revenue CAGR (5Y)

Public AnalystScope base case: 9.0% | +/- 1.0% => +/-$12/sh

Allowed range: 3.0% to 15.0%

Terminal Growth

Public AnalystScope base case: 2.8% | +/- 0.5% => +/-$9/sh

Allowed range: 1.3% to 4.3%

WACC

Public AnalystScope base case: 8.8% | +/- 0.5% => -$11/sh

Allowed range: 6.8% to 10.8%

Operating Margin (Year 5)

Public AnalystScope base case: 36.5% | +/- 100 bps => +/-$8/sh

Allowed range: 28.5% to 44.5%

Saved private scenarios

Save up to 5 named scenarios for ADBE. These are your scenarios: they never overwrite the public AnalystScope base case and remain clearly separate from public research.

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Notes stay local to this browser unless you sign in to the private workspace, and they never appear as published AnalystScope research.

No private scenarios saved yet. Make a change to the published base case, then save a named scenario here.

Published base case

Fair value

$270

Upside / Downside

+15.1 upside

Model signal

Buy

Published base-case output

Scenario output reprices the published DCF and multiple methods from projected year-5 revenue, margin, free cash flow, EBITDA, and EPS anchors. Market multiples and capital structure stay anchored to the published base framework.

Fair value

$270

$0/sh vs published base case

Upside / Downside

+15.1 upside

+0.0 pts vs published base case

Model signal

Buy

Unchanged versus the published base case.

Method movement inside the scenario

This breakdown shows what moved inside the published valuation framework when you edit the scenario. The published AnalystScope base case stays anchored, and any method without a clean projected anchor remains pinned to that framework.

Method rows below reflect the current edited scenario state, not just the saved scenario snapshots.

Influence tags are directional rather than exact attribution. They estimate which edited input is moving each method most by reverting one assumption at a time while the other edited inputs stay in place.

3 of 3 methods support model-native repricingModel-native bridge

Method	Published base	Edited scenario	Delta	How it moved / main drivers
DCF (Base) DCF-style \| 45% weight	$277	$277	$0/sh	Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case.
NTM P/E Multiple P/E-style \| 35% weight	$266	$266	$0/sh	Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case.
EV/EBITDA Cross-check EV-based multiple \| 20% weight	$262	$262	$0/sh	Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case.
Weighted fair value Published framework result \| Published framework result	$270	$270	+$0/sh	Moved Combines the repriced method outputs using the published AnalystScope weights. No single edited assumption is dominating this move in a material way.

Published base case vs private scenarios

Compare the published AnalystScope base case against your saved private scenarios in one view. Saved scenarios remain local to this browser, and the table below reflects saved snapshots rather than any unsaved edits currently sitting in the editor.

Fair-value comparisons use the same workbench recalculation path as the editor above.

Published base case stays pinned as the anchor row.

Scenario	Revenue CAGR (5Y)	Terminal Growth	WACC	Op. Margin (Y5)	Fair Value	Upside / Downside	Model Signal	Delta vs Base	Action
AnalystScope base case Published Official AnalystScope anchor row.	9.0%	2.8%	8.8%	36.5%	$270	+15.1 upside	Buy	Published anchor

Supporting research

Quality, normalization, and monitoring evidence

Annual model base: FY2023 | FY2024 | FY2025

Thesis scorecard

Growth

Strong

Creative Cloud and document workflow still support a healthy medium-term growth base.

Profitability

Strong

High gross margin and strong conversion keep the operating model resilient.

Balance sheet

Strong

Net cash and recurring software economics support flexibility.

Valuation

Strong

The multiple has reset enough to make the spread more attractive than it was a year ago.

Execution / Resilience

Moderate

AI product execution still matters, but Adobe retains strong workflow entrenchment.

Current source status

Quote: Daily scheduled refresh as of Jul 21, 2026, 6:05 AM UTC. Fresh through Jul 22, 2026, 6:05 AM UTC.

Reported fundamentals: Fundamentals refreshed 21 Jul 2026, 01:32 UTC. Fresh through 21 Jul 2026, 13:32 UTC.

Latest filing: 4 filed Jul 17, 2026 | Reporting period Jul 15, 2026. Filing refreshed Jul 21, 2026, 1:32 AM UTC. Fresh through Jul 21, 2026, 1:32 PM UTC.

Annual model-base income-statement, cash-flow, and balance-sheet metrics, plus cross-statement quality relationships with compact prior-FY direction cues, derived from the curated statement backbone.

Basis: FY2023 | FY2024 | FY2025. Live reported fundamentals remain available in the reconciliation section.

Operating and cash-flow trends

Model-base statements

Revenue growth (1Y)

+10.7%

Gross margin

88.7%

Operating margin

35.3%

Operating margin change vs prior FY

+0.4 pts

EBITDA margin

37.4%

EBITDA margin change vs prior FY

+0.2 pts

Operating income growth (1Y)

+12.0%

Net margin

29.4%

FCF margin

38.2%

FCF margin change vs prior FY

+1.0 pts

FCF growth (1Y)

+13.8%

Balance sheet quality

Model-base statements

Cash & investments

$8.8B

Total debt

$4.0B

Net cash / (debt)

Net cash $4.8B

Net cash / (debt) as % of revenue

Net cash 20.2% of revenue

Liabilities / assets

Stable

vs FY2024 (-2.6 pts)

42.9%

Cross-statement quality

Model-base statements

Gross-to-operating spread

53.4 pts

Operating cash flow / net income

Stable

vs FY2024 (-0.0x)

1.4x

Operating cash flow / EBITDA

Stable

vs FY2024 (+0.0x)

1.1x

Free cash flow / net income

Stable

vs FY2024 (-0.0x)

1.3x

CapEx as % of revenue

Stable

vs FY2024 (-0.2 pts)

1.7%

CapEx as % of operating cash flow

Stable

vs FY2024 (-0.6 pts)

4.2%

CapEx / D&A

Stable

vs FY2024 (+0.0x)

0.8x

Cash & investments / total debt

Stable

vs FY2024 (+0.1x)

2.2x

Shareholders' equity as % of revenue

84.0%

Asset turnover

Stable

vs FY2024 (+0.0x)

0.7x

Compact model-base diagnostics for analyst triage, highlighting where the durable valuation base is diverging most clearly from the latest reported picture.

Adjustment focus

Large analyst adjustment

Balance sheet | Net Cash / (Debt) | +$2.6B / +11% of revenue

Revenue momentum

Stable

+10.7% latest 1Y growth

vs +10.8% prior 1Y

Operating margin trend

Stable

35.3% latest margin

+41 bps vs prior FY

FCF margin trend

Improving

38.2% latest FCF margin

+103 bps vs prior FY

Balance-sheet posture

Stable

Net cash 20.2% of revenue

vs Net cash 20.0% of revenue prior FY

How to read this

Reported = the latest company-reported figure. Model base = AnalystScope's comparable operating base used for valuation and thesis work. It may include standardization, conservative balance-sheet treatment, working-capital cleanup, and through-cycle adjustments when current reported numbers do not look durable.

This is an analyst model base, not a claim of perfect adjusted truth. Larger gaps can reflect deliberate cyclical or base-case adjustments, not just light accounting cleanup.

Why the model base differs

For Adobe, the model base is meant to reflect durable subscription and workflow economics rather than short-term seat timing or quarter-specific demand noise.

Rows are sorted by largest comparable adjustment first.

Metric	Model base	Live reported	Variance vs reported	Adjustment size	Why lower / higher?
Net Cash / (Debt)	$4.8B FY2025 model base	$2.2B Live reported balance sheet	+$2.6B / +11% of revenue	Large analyst adjustment	Model base is less conservative than the live reported balance-sheet figure because the latest reported balance does not appear fully representative. It retains a conservative net-cash view without assuming all liquidity is immediately distributable.
FCF (TTM)	$9.1B FY2025 model base	$9.9B Live reported TTM	-$800.0M / -8%	Close to reported	Model base is lower than live reported because cash generation is being smoothed for timing effects rather than taken at face value. It adjusts for working-capital timing and avoids over-reading unusually favorable billings conversion.
Operating Margin	35.3% FY2025 model base	36.6% Live reported margin	-1.3 pts	Close to reported	Model base is lower than live reported because current margin strength is not being treated as a permanent through-cycle outcome. It reduces temporary product-launch and go-to-market timing distortion while preserving Adobe's structural software economics.
Revenue (TTM)	$23.8B FY2025 model base	$23.8B Live reported TTM	+$0.0 / +0%	Close to reported	Model base keeps revenue close to live reported because the latest run-rate already looks broadly representative. It smooths enterprise seat timing and keeps the base on durable document and creative demand rather than one quarter of bookings noise.

Near-term catalysts

Booking and remaining performance obligation commentary remain the cleanest near-term signals.

AI product monetization and attach-rate disclosures could materially influence the growth narrative.

Any cleaner evidence of enterprise workflow adoption would improve confidence in the current fair-value range.

What we are watching

Whether Adobe can translate AI product enthusiasm into durable paid workflow expansion.

How stable enterprise demand remains across both creative and document workflow budgets.

Any sign that the current cash-conversion quality is softening as the company invests for the next cycle.

Date	Event	Published rating	Note
Apr 9, 2026	New	Buy	Started coverage with a Buy view on durable software economics and a more attractive post-reset valuation.