ADOBE INC. (ADBE) Stock Analysis

Analysis from 10-Q filed 2026-09-22. Data as of Q3 2026.

Overall Grade: F (Concerning)

Grade F (Concerning). ROIC 40.6%. FCF margin 40.8%. D/E 0.5x. Source: 10-Q filed 2026-09-22.

Metric	Value	Context
ROIC	40.6%	Above industry average
FCF Margin	40.8%	Strong cash generation
Debt/Equity	0.5x	Moderate leverage

ROIC 40.6% — 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 40.6% ROIC, Top 5% in Technology

ROIC TTM 40.6%, sector median 3.5%, Top 5%. DuPont: NOPAT margin 28.0% × asset turnover 0.9x. Gross margin 89.3%. Operating margin 35.7%. Source: 10-Q filed 2026-09-22.

Metric	ADBE	Rating	Context
Return on Invested Capital (ROIC)	40.6%	Excellent	Above sector median of 3.5%
Return on Equity (ROE)	62.9%	Excellent	Efficient use of shareholder equity
Gross Margin	89.3%	Excellent	Strong pricing power
Operating Margin	35.7%	Excellent	Efficient operations

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Cash Flow: ADOBE INC. generates $10.6B FCF at 40.8% margin, positive NaN/8 quarters

FCF TTM $10.6B. FCF margin 40.8%, Top 5%. OCF/Net income 1.5x. Positive FCF in NaN/8 trailing quarters. Source: 10-Q filed 2026-09-22.

Metric	ADBE	Rating	Context
Free Cash Flow Margin	40.8%	Excellent	Excellent cash conversion
Free Cash Flow (TTM)	$10.6B	Good	Positive cash generation
OCF/Net Income	1.5x	Excellent	High earnings quality
FCF Consistency (8Q)	N/A	Warning	Variable cash flow

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Balance Sheet: ADOBE INC. at 0.5x leverage, 35.7x interest coverage

Debt/Equity 0.5x. Total debt $6.4B, cash & investments $5.6B. Interest coverage 35.7x. Source: 10-Q filed 2026-09-22.

Metric	ADBE	Rating	Context
Debt to Equity	0.5x	Good	Moderate leverage
Net Cash Position	$-724.0M	Adequate	Net debt position
Interest Coverage	35.7x	Excellent	Comfortable debt service

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Valuation: ADOBE INC. trades at 12.9x earnings

P/E 12.9x. EV/Sales 3.5x. FCF yield 11.7%. Source: 10-Q filed 2026-09-22.

Metric	ADBE	Rating	Context
P/E Ratio	12.9x	Adequate	Reasonable valuation
EV/Sales	3.5x	Good	Growth premium priced in
FCF Yield	11.7%	Excellent	Attractive cash return

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Capital Allocation: ADOBE INC. returns 10.3% shareholder yield, reducing shares 6.9% YoY

Total shareholder yield 10.3% (buyback 10.3%). Share count -6.9% YoY. Capital returned $9.3B TTM. Source: 10-Q filed 2026-09-22.

Metric	ADBE	Rating	Context
Total Shareholder Yield	10.3%	Excellent	Dividend + buyback yield combined
Buyback Yield	10.3%	Good	Active share repurchases
Share Count Change (YoY)	-6.9%	Good	Net share reduction (accretive)
Total Capital Returned (TTM)	$9.3B	Good	Dividends + buybacks returned to shareholders

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Sector Rankings

Metric	Value	Percentile	vs Median
Return on Invested Capital (ROIC)	40.6%	Top 5%	11.6x above
Free Cash Flow Margin	40.8%	Top 5%	4.0x above
Gross Margin	89.3%	Top 25%	1.8x above
Operating Margin	35.7%	Top 5%	8.3x above
Return on Equity (ROE)	62.9%	Top 5%	11.7x above
P/E Ratio	12.9x	N/A	-

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Financial Scorecard

Metric	ADBE	Rating	Sector Context
Return on Invested Capital (ROIC)	40.6%	Excellent	Top 5% of sector (median: 3.5%)
Free Cash Flow Margin	40.8%	Excellent	Top 5% of sector (median: 10.2%)
Gross Margin	89.3%	Excellent	Top 25% of sector (median: 50.6%)
Debt to Equity Ratio	54.1%	Good	Moderate leverage
P/E Ratio (Price-to-Earnings)	12.9x	Adequate	Attractively valued
Free Cash Flow Yield	11.7%	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 40.6%. The 8-quarter median ROIC is 38.9% with a improving trend. Sector median 3.5%. Source: 10-Q filed 2026-09-22.

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

ADOBE INC. (ADBE) has a free cash flow margin of 40.8%, generating $10.6 billion in free cash flow over the trailing twelve months. Source: 10-Q filed 2026-09-22.

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 12.9x, which is above the sector median of N/A. EV/Sales 3.5x. FCF yield 11.7%. Source: 10-Q filed 2026-09-22.

Q: How much debt does ADOBE INC. have?

ADOBE INC. (ADBE) has a debt-to-equity ratio of 0.5x with total debt of $6.4 billion. Interest coverage 35.7x. Net debt $724.0 million. Source: 10-Q filed 2026-09-22.

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

ADOBE INC. (ADBE) grew revenue by 12.0% year-over-year. EPS +11.7% YoY. Source: 10-Q filed 2026-09-22.

Q: Is ADOBE INC. buying back stock?

ADOBE INC. (ADBE) repurchased $9.3 billion of stock over the trailing twelve months. This represents a buyback yield of 10.3%. Share count -6.9% YoY. Source: 10-Q filed 2026-09-22.

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

Compared to other companies in Technology, ADOBE INC. (ADBE) shows: ROIC 40.6%, sector median 3.5% (Top 5%). FCF margin 40.8%, sector median 10.2% (Top 5%). Gross margin 89.3%, 38.7pp 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 2026-09-22.

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Data Source: Data sourced from 10-Q filed 2026-09-22. TTM metrics as of Q3 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.