| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 79 | 13.3x | 17.4x | Top tier | |
Growth | 61 | 12.0% | 7.1% | Around median | |
Quality | 97 | 39.4% | 4.5% | Top tier | |
Safety | 86 | 0.1x | 2.6x | Top tier | |
Capital Return | 53 | 0.00% | 0.18% | Around median | |
Momentum | 35 | -19.0% | 1.3% | Bottom tier | |
Sentiment | 38 | 23 | 3 | Bottom tier |
The floor: what the company is worth if growth stopped today
35% of today's price is what a buyer pays for growth that has not happened yet.
10-year US Treasury yield 5.28% as of 2026-10-02. Estimates computed from company data and analyst targets, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Adobe operates in three interconnected arenas: creativity, document productivity, and customer experience. The company generates most of its revenue from subscriptions to applications and platforms such as Creative Cloud, Photoshop, Premiere, Firefly, Acrobat, and Express, in addition to Adobe Experience Platform, Adobe Experience Manager, GenStudio, and enterprise customer experience orchestration solutions. In Q3 fiscal 2026, subscription revenue from the two customer groups reached $6.56 billion, or about 97% of total revenue, illustrating the business model's heavy reliance on recurring revenue.
Adobe reported record revenue of $6.76 billion in Q3 fiscal 2026, up 13% year over year on a reported basis, EDGAR net income of $1.8 billion, and GAAP diluted earnings per share of $4.62. Gross profit was $6.0 billion, equivalent to a gross margin of approximately 88.8%, while net income margin was approximately 26.6%. Operating cash flow reached a quarterly record of $2.52 billion, with $5.64 billion in cash and short-term investments at the end of the quarter.
Subscription revenue in Q3 fiscal 2026 was split between $4.65 billion for the Creative and Marketing Professionals category, with reported growth of 13%, and $1.91 billion for the Business Professionals and Consumers category, with reported growth of 16%. The two categories represent approximately 68.8% and 28.3% of total revenue, respectively. On a trailing-twelve-month basis in EDGAR data, revenue reached $26.0 billion, gross profit reached $23.2 billion, net income reached $7.3 billion, and earnings per share reached approximately $18.42.
The average analyst price target is $269.84 within a wide range of $190 to $379, with a “Buy” consensus; the average is approximately 42% above the lower end of the 52-week range of $190.12 and approximately 27% below its high of $368.73. The bullish view is countered by Bank of America's “Sell” rating and $220 target in September 2026, while the wide target range reflects significant disagreement over the impact of slowing net new annual recurring revenue and the speed at which growth in AI usage will convert into income. The provided valuation data do not include a reliable current earnings multiple, so the target range and the 52-week range remain the two clearest numerical valuation references.
Figures in the text are as of 2026-09-23; the live price is shown at the top of the page.
Adobe generated record revenue of $6.76 billion, with reported year-over-year growth of 13%, exceeding the analyst estimate of $6.69 billion. Adjusted earnings per share were $6.13 versus an estimate of $6.07, while GAAP earnings per share were $4.62. EDGAR data showed gross profit of $6.0 billion and net income of $1.8 billion. Operating cash flow also reached a quarterly record of $2.52 billion.
Yes, annual recurring revenue from products designed primarily for AI exceeded $650 million in Q3 fiscal 2026, growing by more than 150% year over year. Annual recurring revenue from the Firefly application and credit packs rose 40% compared with the previous quarter, with accelerating credit consumption within Creative Cloud and Firefly. Adobe added music, speech, and sound-effect generation to Firefly and expanded Creative Agent to Photoshop and Premiere. However, AI-related revenue remained below 2% of the company's total revenue, according to a September 8, 2026 report, so commercial conversion remains the key test.
Automated analysis for informational purposes only — not investment advice.
Adobe is targeting revenue of between $6.80 billion and $6.85 billion in Q4 fiscal 2026, with a midpoint of $6.825 billion versus a consensus of $6.85 billion. It expects Business Professionals and Consumers subscription revenue of between $1.93 billion and $1.95 billion and Creative and Marketing Professionals revenue of between $4.665 billion and $4.695 billion. At the same time, the company raised its fiscal 2026 revenue target to a range of $26.576–$26.626 billion and adjusted earnings per share to $24.45–$24.50. Management said foreign exchange differences, rather than a change in the business, limited the full carryover of the third-quarter beat into annual guidance.
Adobe uses the free model to expand its user base before increasing engagement and converting usage into annual recurring revenue. In Q3 fiscal 2026, the creative free-user base exceeded 100 million monthly active users and grew by more than 70% year over year, while Acrobat and Express together surpassed 900 million users, growing by more than 25%. Management said it directed some user traffic to the free path and delayed certain Creative Cloud pricing actions to focus on user acquisition. The risk is that net new annual recurring revenue declined by approximately 36% to 37% year over year before this reach was fully converted into paid subscriptions.
Adobe announced that Anil Chakravarthy will become president and chief executive officer and join the board of directors effective December 1, 2026. The company stated that Shantanu Narayen will transition on the same date to the role of executive chairman, after 29 years at Adobe. Chakravarthy led Digital Experience and also oversaw the company's enterprise field operations since joining in January 2020. As of the September 10, 2026 call, Narayen held the roles of chairman and chief executive officer, and the stated priority for the transition was executing Q4 fiscal 2026 and the agentic software strategy.
Adobe agreed to acquire Topaz Labs and expects to close the transaction in Q4 fiscal 2026 following regulatory approvals and the satisfaction of customary conditions. Topaz Labs has more than one million users and AI technologies for enhancing images and video, including footage enhancement and the restoration and remastering of archival content. Adobe plans to integrate these capabilities into Firefly, Creative Cloud, and Firefly Enterprise. Management views the technology as a natural extension in image and video quality, but it did not provide a quantified financial impact for the transaction in the context.
