Adobe Inc. (ADBE) Stock Valuation — PE Analysis
Software - Application · NASDAQ
Current Price
$252.23
PE Ratio (TTM)
14.1x
Intrinsic Value
$391.89
+35.6% margin of safety
COMPETITIVE MOAT
↑Dominant Creative Software Ecosystem
Adobe's Creative Cloud suite is the industry standard, creating high switching costs for professionals and businesses. This deep integration fosters strong customer loyalty and network effects.
↑Massive User Base and Data Advantage
Over one billion monthly active users generate vast amounts of data. This scale allows Adobe to refine its AI models and product offerings, creating a continuous feedback loop.
↑Subscription Model and Recurring Revenue
The subscription-based model ensures predictable revenue streams and high customer retention. This financial stability supports ongoing investment in innovation and AI integration.
INVESTMENT RISKS
↓Intensifying AI-Driven Disruption
The rapid advancement of AI tools could democratize content creation, potentially reducing reliance on Adobe's premium software. This necessitates continuous innovation to maintain its edge.
↓Customer Concentration in Creative Industries
While broad, Adobe's core customer base is concentrated in creative fields. A significant shift in these industries or a major competitor targeting them could impact revenue.
↓Regulatory Scrutiny on Market Dominance
Adobe's strong market position may attract increased regulatory attention regarding anti-competitive practices, potentially leading to forced changes in business operations or acquisitions.
Base case
ADBE base case PE valuation
A base case PE valuation for ADBE estimates a fair value of about $391.89 per share, against a current price of $252.23. The model assumes 13.2% annual earnings growth, a 13.68x target PE multiple, and a 10% discount rate.
Intrinsic Value
$391.89
Margin of safety
+35.6%
Expected annual return
+9.2%
Base case assumptions: 13.2% annual earnings growth, 13.68x target PE, 10% discount rate, 5 year projection. Data as of 2026-09-11.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ADBE PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Adobe Inc. respond.
Open PE Calculator for ADBECompany Overview
Adobe Inc. stands as a prominent global software provider, delivering a diverse range of solutions. Its operations are structured into three primary business divisions: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment empowers individuals, teams, and enterprises to generate, disseminate, and amplify various forms of content through its array of products and services, including the cloud-native Document Cloud platform. Central to this segment is Creative Cloud, its subscription-based flagship, granting access to a comprehensive suite of creative tools. This division caters to a diverse range of users, from professional content creators and marketers to educators, communicators, and general consumers. Adobe's Digital Experience division offers an integrated suite of applications and services designed to empower brands and businesses to craft, orchestrate, assess, and enhance customer journeys, from initial analytical insights to final commercial transactions. It serves a broad professional base including marketing teams, advertisers, agencies, data scientists, and senior executives. The Publishing and Advertising segment provides specialized offerings such as e-learning tools, technical documentation services, web conferencing solutions, advanced printing technologies, and its Advertising Cloud suite. Adobe engages directly with enterprise clients through its dedicated sales teams and regional offices. Individual end-users can access its offerings via app stores or its official website, adobe.com. Additionally, an extensive indirect channel supports distribution, encompassing partners such as distributors, value-added resellers, system integrators, software vendors, retailers, and original equipment manufacturers. Established in 1982, the company, initially named Adobe Systems Incorporated, rebranded as Adobe Inc. in October 2018. Its corporate headquarters are situated in San Jose, California.
Financial Metrics — ADBE PE Stock Valuation Data
PE Ratio (TTM)
14.1x
PEG Ratio
1.22
Earnings Yield
7.31%
ROE (TTM)
62.9%
Revenue/Share (TTM)
$65.75
Debt/Equity
0.03x
Frequently Asked Questions
What is the PE ratio of ADBE?
The trailing twelve-month PE ratio of ADBE reflects how much investors pay per dollar of Adobe Inc.'s earnings. This metric is most useful when compared to Software - Application peers and the company's own historical range.
Is ADBE overvalued based on PE ratio?
ADBE's PE of 14.1x combined with a PEG ratio of 1.22 provides a growth-adjusted perspective. A PEG near 1.0 means the P/E is roughly in line with the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Software - Application, a DCF analysis may be more appropriate.
How do I value ADBE stock using PE ratio?
To value Adobe Inc. using PE: (1) Compare the current PE (14.1x) against the Software - Application median to assess relative pricing, (2) check the PEG ratio (1.22) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of ADBE?
ADBE's PEG ratio is 1.22, calculated by dividing the PE ratio (14.1x) by the expected earnings growth rate. A PEG near 1.0 means the P/E is roughly in line with the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for ADBE stock valuation?
PE ratio gives a quick relative read — how ADBE is priced versus Software - Application peers. DCF provides an absolute value based on projected free cash flows. For ADBE, with a strong ROE of 62.9%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See ADBE DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Technology valuationsP/E and DCF value ADBE with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-09-11. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.