The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 82 | 12.0x | 20.8x | Top tier | |
Growth | 61 | 11.5% | 6.1% | Around median | |
Quality | 96 | 59.9% | 6.6% | Top tier | |
Safety | 85 | — | 0.7x | Top tier | |
Capital Return | 79 | — | 2.02% | Top tier | |
Momentum | 7 | -45.2% | 4.1% | Bottom tier | |
Sentiment | 72 | 23 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, 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 Inc. is a subscription-based software company centered on content creation, productivity, and digital customer experience management. The company serves three categories explicitly mentioned by management: business professionals and consumers through Acrobat, Adobe Reader, Express, Acrobat AI Assistant, and PDF Spaces; creators and professionals through Creative Cloud, Photoshop, Illustrator, Premiere, Lightroom, and Firefly; and marketing professionals through Adobe Experience Platform, Adobe Experience Manager, GenStudio, and Adobe CX Enterprise. The revenue model relies primarily on subscriptions, as subscription revenue from customer groups in the second quarter of fiscal 2026 reached about $6.39 billion out of total revenue of $6.62 billion, meaning subscriptions made up the largest portion of quarterly sales.
In the second quarter of fiscal 2026, Adobe reported record revenue of $6.62 billion, up 13% as reported and 11% on a constant-currency basis, with GAAP EPS of $4.25, up 8%, and non-GAAP EPS of $5.96, up 18%. Subscription revenue was distributed between $1.85 billion for the business professionals and consumers category, up 15% on a constant-currency basis, and $4.54 billion for the creators and marketing professionals category, up 11% on a constant-currency basis. In terms of mix, the business professionals and consumers category represented about 28% of quarterly revenue, the creators and marketing professionals category represented about 69%, while subscription revenue approached 97% of total revenue.
The latest available EDGAR data for the first quarter of 2026 shows revenue of $6.4 billion, gross profit of $5.7 billion, net income of $1.9 billion, and EPS of $4.6. Based on these figures, the calculated gross margin was about 89% and the net margin about 30%, highlighting the high-margin nature of Adobe’s subscription software model. On a trailing twelve-month basis, revenue reached $24.0 billion, gross profit was $21.4 billion, and net income was $7.2 billion, with EPS of about $17.44.
The valuation of ADBE currently depends on comparing the stock with the average analyst price target of $259.76, with a wide target range between $190 and $379 and a consensus rated as Buy. I do not cite a specific real-time stock price because that figure changes, but the 52-week range between $190.12 and $392.58 shows that the market has sharply repriced the stock during the year. The P/E multiple is not available in the provided data, so the valuation judgment remains more tied to Adobe’s ability to convert AI and freemium growth into ARR and revenue, and to how close the real-time price shown outside the text is to the analyst target.
Figures in the text are as of 2026-06-29; the live price is shown at the top of the page.
Adobe reported record revenue of $6.62 billion in the second quarter of fiscal 2026, up 13% as reported and 11% on a constant-currency basis. GAAP EPS was about $4.25 and non-GAAP EPS was about $5.96, which are strong operating figures. However, news indicated that the stock fell by about 6% to 6.7% because of the departure of CFO Dan Durn, investor concerns about the artificial intelligence strategy, and the reduction in second-half ARR growth expectations due to the shift to freemium.
The most prominent products are Firefly, Acrobat AI Assistant, Adobe Productivity Agent, Adobe Creative Agent, and Adobe CX Enterprise coworker. The company said AI-first ARR exceeded $500 million, up 3 times year over year, while Firefly ending ARR approached $300 million exiting the second quarter. Acrobat AI Assistant ARR also grew about 3 times year over year, and the number of monthly active paid users of this product increased by more than 150%.
The strategy means Adobe wants to make it easier for users to enter Acrobat, Express, and Firefly before imposing paywalls, with the goal of building usage habits and then converting a portion of users to paid plans or credit consumption. Management said Acrobat and Express exceeded 850 million monthly active users, while Creative Freemium MAU rose to more than 90 million. In contrast, the company acknowledged that this decision will pressure short-term ARR, especially with the deferral of Creative Cloud pipeline optimizations in the second half.
Automated analysis for informational purposes only — not investment advice.
Adobe closed the SEMrush acquisition in April, and the deal added about $480 million of ARR to the company’s business book. The goal is to integrate SEMrush’s capabilities in search engine optimization and generative engine optimization with Adobe Experience Manager and agentic web apps. Management said the integrated brand visibility solution will be presented at Cannes Lions, and that it will combine SEMrush’s external knowledge about what users are searching for with Adobe content and its internal capabilities in experience management.
Adobe raised its fiscal 2026 targets in the call transcript to total revenue between $20.5 and $20.6 billion, with non-GAAP EPS between $24.35 and $24.45. For the third quarter, the company is also targeting revenue between $6.67 and $6.72 billion, GAAP EPS between $4.40 and $4.45, and non-GAAP EPS between $6.05 and $6.10. The fiscal-year targets include SEMrush, and also assume a non-GAAP operating margin of about 45% for the year and 44% for the third quarter.
In the second quarter of fiscal 2026, Adobe generated operating cash flow of $2.17 billion and ended the quarter with cash and short-term investments of $5.63 billion. The company repurchased about 8.5 million shares during the quarter and had about $27 billion remaining under repurchase authorizations. It also announced a new $25 billion share repurchase authorization in April, and management said it continues to spend on cloud models, marketing, and products related to artificial intelligence.