ADOBE INC. (ADBE) Stock Analysis

Analysis from 10-Q filed 2025-09-24. Data as of Q2 2026.

Overall Grade: F (Concerning)

Grade F (Concerning). ROIC 40.4%. FCF margin 40.8%. D/E 0.6x. Source: 10-Q filed 2025-09-24.

Metric	Value	Context
ROIC	40.4%	Above industry average
FCF Margin	40.8%	Strong cash generation
Debt/Equity	0.6x	Moderate leverage

ROIC 40.4% — Top 5% of sector peers. FCF margin 40.8% — Top 5%.

Explore ADOBE INC.: Earnings History | Filings

Programmatic access: Available via MCP at mcp.metricduck.com. Tools for ADBE: get_company_overview, get_filing_index (lens: debt_stress, management_outlook, risk_trajectory), get_filing_changes, get_metric_history, compare_companies, screen_filing_signals.

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Profitability: ADOBE INC. earns 40.4% ROIC, Top 5% in Technology

ROIC TTM 40.4%, sector median 3.6%, Top 5%. DuPont: NOPAT margin 28.6% × asset turnover 0.9x. Gross margin 89.4%. Operating margin 36.1%. Source: 10-Q filed 2025-09-24.

Metric	ADBE	Rating	Context
Return on Invested Capital (ROIC)	40.4%	Excellent	Above sector median of 3.6%
Return on Equity (ROE)	62.4%	Excellent	Efficient use of shareholder equity
Gross Margin	89.4%	Excellent	Strong pricing power
Operating Margin	36.1%	Excellent	Efficient operations

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Cash Flow: ADOBE INC. generates $10.3B FCF at 40.8% margin, positive NaN/8 quarters

FCF TTM $10.3B. FCF margin 40.8%, Top 5%. OCF/Net income 1.4x. Positive FCF in NaN/8 trailing quarters. Source: 10-Q filed 2025-09-24.

Metric	ADBE	Rating	Context
Free Cash Flow Margin	40.8%	Excellent	Excellent cash conversion
Free Cash Flow (TTM)	$10.3B	Good	Positive cash generation
OCF/Net Income	1.4x	Excellent	High earnings quality
FCF Consistency (8Q)	N/A	Warning	Variable cash flow

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Balance Sheet: ADOBE INC. at 0.6x leverage

Debt/Equity 0.6x. Total debt $6.6B, cash & investments $5.6B. Source: 10-Q filed 2025-09-24.

Metric	ADBE	Rating	Context
Debt to Equity	0.6x	Good	Moderate leverage
Net Cash Position	$-1.0B	Warning	Net debt position

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Valuation: ADOBE INC. trades at 14.8x earnings

P/E 14.8x. EV/Sales 4.2x. FCF yield 9.6%. Source: 10-Q filed 2025-09-24.

Metric	ADBE	Rating	Context
P/E Ratio	14.8x	Adequate	Reasonable valuation
EV/Sales	4.2x	Good	Growth premium priced in
FCF Yield	9.6%	Excellent	Attractive cash return

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Capital Allocation: ADOBE INC. returns 8.5% shareholder yield

Total shareholder yield 8.5% (buyback 8.5%). Capital returned $9.1B TTM. Source: 10-Q filed 2025-09-24.

Metric	ADBE	Rating	Context
Total Shareholder Yield	8.5%	Excellent	Dividend + buyback yield combined
Buyback Yield	8.5%	Good	Active share repurchases
Total Capital Returned (TTM)	$9.1B	Good	Dividends + buybacks returned to shareholders

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Sector Rankings

Metric	Value	Percentile	vs Median
Return on Invested Capital (ROIC)	40.4%	Top 5%	11.3x above
Free Cash Flow Margin	40.8%	Top 5%	4.8x above
Gross Margin	89.4%	Top 25%	1.8x above
Operating Margin	36.1%	Top 5%	7.9x above
Return on Equity (ROE)	62.4%	Top 5%	11.5x above
P/E Ratio	14.8x	N/A	-

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Financial Scorecard

Metric	ADBE	Rating	Sector Context
Return on Invested Capital (ROIC)	40.4%	Excellent	Top 5% of sector (median: 3.6%)
Free Cash Flow Margin	40.8%	Excellent	Top 5% of sector (median: 8.5%)
Gross Margin	89.4%	Excellent	Top 25% of sector (median: 49.9%)
Debt to Equity Ratio	57.7%	Good	Moderate leverage
P/E Ratio (Price-to-Earnings)	14.8x	Adequate	Attractively valued
Free Cash Flow Yield	9.6%	Excellent	High cash return

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Frequently Asked Questions

Q: What is ADOBE INC.'s Return on Invested Capital (ROIC)?

ADOBE INC. (ADBE) has a trailing twelve-month Return on Invested Capital (ROIC) of 40.4%. Sector median 3.6%. Source: 10-Q filed 2025-09-24.

Q: What is ADOBE INC.'s Free Cash Flow Margin?

ADOBE INC. (ADBE) has a free cash flow margin of 40.8%, generating $10.3 billion in free cash flow over the trailing twelve months. Source: 10-Q filed 2025-09-24.

Q: What is ADOBE INC.'s P/E ratio and how does it compare to peers?

ADOBE INC. (ADBE) trades at a P/E ratio of 14.8x, which is above the sector median of N/A. EV/Sales 4.2x. FCF yield 9.6%. Source: 10-Q filed 2025-09-24.

Q: How much debt does ADOBE INC. have?

ADOBE INC. (ADBE) has a debt-to-equity ratio of 0.6x with total debt of $6.6 billion. Net debt $1.0 billion. Source: 10-Q filed 2025-09-24.

Q: What is ADOBE INC.'s revenue and earnings growth?

ADOBE INC. (ADBE) grew revenue by 11.5% year-over-year. EPS +11.8% YoY. Source: 10-Q filed 2025-09-24.

Q: Is ADOBE INC. buying back stock?

ADOBE INC. (ADBE) repurchased $9.1 billion of stock over the trailing twelve months. This represents a buyback yield of 8.5%. Source: 10-Q filed 2025-09-24.

Q: How does ADOBE INC. compare to competitors in Technology?

Compared to other companies in Technology, ADOBE INC. (ADBE) shows: ROIC 40.4%, sector median 3.6% (Top 5%). FCF margin 40.8%, sector median 8.5% (Top 5%). Gross margin 89.4%, 39.5pp above sector median. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.

Q: What warning signs should I watch for with ADOBE INC.?

No quantitative warning flags fired for ADOBE INC. (ADBE) on margin trend, FCF trend, ROIC trend, or leverage thresholds. Source: 10-Q filed 2025-09-24.

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Data Source: Data sourced from 10-Q filed 2025-09-24. TTM metrics as of Q2 2026.

Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.

Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.

This analysis is for informational purposes only and does not constitute investment advice.