Microsoft Excel LibreOffice Calc

Adobe Inc. (ADBE)


Common Stock Valuation Ratios (Price Multiples)

Difficulty: Beginner


Current Valuation Ratios

Adobe Inc., current price multiples

Microsoft Excel LibreOffice Calc
Adobe Inc. Alphabet Inc. Facebook Inc. International Business Machines Corp. Intuit Inc. Microsoft Corp. Oracle Corp. salesforce.com inc. Software & Computer Services Technology
Selected Financial Data
Current share price (P) $ 270.57
No. shares of common stock outstanding 487,950,943
Growth rate (g) 11.86%
 
Earnings per share (EPS) $ 5.31
Next year expected EPS $ 5.94
Operating profit per share $ 5.82
Sales per share $ 18.51
Book value per share (BVPS) $ 19.19
Ratios (Price Multiples)
Price to earnings (P/E) 50.96 27.96 23.01 14.31 55.15 57.12 48.71 108.35 34.28 25.80
Price to next year expected earnings 45.56 24.65 19.92 11.03 42.00 52.04 41.67 108.26 30.13 22.29
Price-earnings-growth (PEG) 4.30 2.08 1.49 0.48 1.76 5.86 2.88 1,336.09 2.48 1.64
Price to operating profit (P/OP) 46.48 32.65 20.42 9.45 44.61 27.00 13.62 224.80 25.01 19.82
Price to sales (P/S) 14.62 6.28 9.11 1.57 11.20 8.58 4.68 9.05 6.58 5.04
Price to book value (P/BV) 14.10 4.84 6.05 7.43 28.37 11.44 4.07 7.71 6.88 7.02

Based on: 10-K (filing date: 2019-01-25).

If company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.

Otherwise, if company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.


Historical Valuation Ratios (Summary)

Adobe Inc., historical price multiples

Microsoft Excel LibreOffice Calc
Nov 30, 2018 Dec 1, 2017 Dec 2, 2016 Nov 27, 2015 Nov 28, 2014 Nov 29, 2013
Price to earnings (P/E) 46.11 57.41 46.80 70.59 132.73 104.21
Price to operating profit (P/OP) 42.06 44.86 36.62 49.21 86.32 71.49
Price to sales (P/S) 13.23 13.32 9.34 9.27 8.59 7.45
Price to book value (P/BV) 12.76 11.50 7.37 6.35 5.26 4.49

Based on: 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19), 10-K (filing date: 2015-01-20), 10-K (filing date: 2014-01-21).

Ratio Description The company
P/E ratio The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. Adobe Inc.’s P/E ratio increased from 2016 to 2017 but then declined significantly from 2017 to 2018.
P/OP ratio Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit. Adobe Inc.’s P/OP ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.
P/S ratio An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. Adobe Inc.’s P/S ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.
P/BV ratio The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company’s required rate of return and its actual rate of return. Adobe Inc.’s P/BV ratio increased from 2016 to 2017 and from 2017 to 2018.

Price to Earnings (P/E)

Adobe Inc., historical P/E calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Nov 30, 2018 Dec 1, 2017 Dec 2, 2016 Nov 27, 2015 Nov 28, 2014 Nov 29, 2013
No. shares of common stock outstanding1 487,725,915 491,578,529 494,078,475 498,330,407 498,314,061 496,604,463
Selected Financial Data (USD $)
Net income (in thousands) 2,590,774  1,693,954  1,168,782  629,551  268,395  289,985 
Earnings per share (EPS)3 5.31 3.45 2.37 1.26 0.54 0.58
Share price1, 2 244.95 197.84 110.71 89.18 71.49 60.85
Ratio
P/E ratio4 46.11 57.41 46.80 70.59 132.73 104.21
Benchmarks
P/E Ratio, Competitors
Alphabet Inc. 25.92 59.34 28.45 29.71 24.87
Facebook Inc. 21.51 35.20 37.05 84.21 74.26
International Business Machines Corp. 14.25 25.07 14.29 9.65 13.55
Intuit Inc. 46.88 37.26 29.60 63.89 26.44
Microsoft Corp. 50.00 26.25 26.08 30.63 16.11 12.14
Oracle Corp. 45.90 22.49 18.53 17.92 16.33 12.78
salesforce.com inc. 731.11 324.94
P/E Ratio, Sector
Software & Computer Services 31.08 35.65 26.47 28.24 21.67
P/E Ratio, Industry
Technology 23.80 27.25 20.95 18.83 18.63

Based on: 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19), 10-K (filing date: 2015-01-20), 10-K (filing date: 2014-01-21).

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of Adobe Inc.’s Annual Report.

2018 Calculations

3 EPS = Net income ÷ No. shares of common stock outstanding
= 2,590,774,000 ÷ 487,725,915 = 5.31

4 P/E ratio = Share price ÷ EPS
= 244.95 ÷ 5.31 = 46.11

Ratio Description The company
P/E ratio The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. Adobe Inc.’s P/E ratio increased from 2016 to 2017 but then declined significantly from 2017 to 2018.

Price to Operating Profit (P/OP)

Adobe Inc., historical P/OP calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Nov 30, 2018 Dec 1, 2017 Dec 2, 2016 Nov 27, 2015 Nov 28, 2014 Nov 29, 2013
No. shares of common stock outstanding1 487,725,915 491,578,529 494,078,475 498,330,407 498,314,061 496,604,463
Selected Financial Data (USD $)
Operating income (in thousands) 2,840,369  2,168,095  1,493,602  903,095  412,685  422,723 
Operating profit per share3 5.82 4.41 3.02 1.81 0.83 0.85
Share price1, 2 244.95 197.84 110.71 89.18 71.49 60.85
Ratio
P/OP ratio4 42.06 44.86 36.62 49.21 86.32 71.49
Benchmarks
P/OP Ratio, Competitors
Alphabet Inc. 30.27 28.74 23.37 24.29 21.78
Facebook Inc. 19.10 27.76 30.46 49.89 43.72
International Business Machines Corp. 9.41 12.22 12.94 8.11 8.79
Intuit Inc. 37.92 25.94 23.33 31.60 18.25
Microsoft Corp. 23.63 24.93 21.70 20.57 12.81 9.91
Oracle Corp. 12.83 16.52 13.09 12.84 12.12 9.51
salesforce.com inc. 395.31 908.77 411.51
P/OP Ratio, Sector
Software & Computer Services 22.67 24.94 21.63 20.98 16.35
P/OP Ratio, Industry
Technology 18.29 19.71 16.57 14.40 14.31

Based on: 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19), 10-K (filing date: 2015-01-20), 10-K (filing date: 2014-01-21).

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of Adobe Inc.’s Annual Report.

2018 Calculations

3 Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 2,840,369,000 ÷ 487,725,915 = 5.82

4 P/OP ratio = Share price ÷ Operating profit per share
= 244.95 ÷ 5.82 = 42.06

Ratio Description The company
P/OP ratio Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit. Adobe Inc.’s P/OP ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

Price to Sales (P/S)

Adobe Inc., historical P/S calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Nov 30, 2018 Dec 1, 2017 Dec 2, 2016 Nov 27, 2015 Nov 28, 2014 Nov 29, 2013
No. shares of common stock outstanding1 487,725,915 491,578,529 494,078,475 498,330,407 498,314,061 496,604,463
Selected Financial Data (USD $)
Revenue (in thousands) 9,030,008  7,301,505  5,854,430  4,795,511  4,147,065  4,055,240 
Sales per share3 18.51 14.85 11.85 9.62 8.32 8.17
Share price1, 2 244.95 197.84 110.71 89.18 71.49 60.85
Ratio
P/S ratio4 13.23 13.32 9.34 9.27 8.59 7.45
Benchmarks
P/S Ratio, Competitors
Alphabet Inc. 5.82 6.78 6.14 6.27 5.44
Facebook Inc. 8.52 13.80 13.70 17.32 17.51
International Business Machines Corp. 1.56 1.82 2.12 1.56 1.76
Intuit Inc. 9.52 6.99 6.17 5.56 5.32
Microsoft Corp. 7.51 6.19 5.13 3.99 4.10 3.41
Oracle Corp. 4.41 5.56 4.45 4.66 4.67 3.75
salesforce.com inc. 8.89 6.96 7.09 7.82 9.54
P/S Ratio, Sector
Software & Computer Services 5.96 6.37 5.44 4.89 4.44
P/S Ratio, Industry
Technology 4.65 4.85 4.01 3.34 3.42

Based on: 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19), 10-K (filing date: 2015-01-20), 10-K (filing date: 2014-01-21).

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of Adobe Inc.’s Annual Report.

2018 Calculations

3 Sales per share = Revenue ÷ No. shares of common stock outstanding
= 9,030,008,000 ÷ 487,725,915 = 18.51

4 P/S ratio = Share price ÷ Sales per share
= 244.95 ÷ 18.51 = 13.23

Ratio Description The company
P/S ratio An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. Adobe Inc.’s P/S ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

Price to Book Value (P/BV)

Adobe Inc., historical P/BV calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Nov 30, 2018 Dec 1, 2017 Dec 2, 2016 Nov 27, 2015 Nov 28, 2014 Nov 29, 2013
No. shares of common stock outstanding1 487,725,915 491,578,529 494,078,475 498,330,407 498,314,061 496,604,463
Selected Financial Data (USD $)
Stockholders’ equity (in thousands) 9,362,114  8,459,869  7,424,835  7,001,580  6,775,905  6,724,634 
Book value per share (BVPS)3 19.20 17.21 15.03 14.05 13.60 13.54
Share price1, 2 244.95 197.84 110.71 89.18 71.49 60.85
Ratio
P/BV ratio4 12.76 11.50 7.37 6.35 5.26 4.49
Benchmarks
P/BV Ratio, Competitors
Alphabet Inc. 4.49 4.93 3.99 3.91 3.44
Facebook Inc. 5.65 7.54 6.39 7.02 6.05
International Business Machines Corp. 7.40 8.20 9.30 8.92 13.73
Intuit Inc. 24.12 26.72 24.96 10.00 7.79
Microsoft Corp. 10.02 7.69 6.08 4.66 3.96 3.36
Oracle Corp. 3.84 3.90 3.49 3.66 3.82 3.13
salesforce.com inc. 9.93 7.78 9.45 10.57 12.79
P/BV Ratio, Sector
Software & Computer Services 6.24 6.22 5.26 4.89 4.55
P/BV Ratio, Industry
Technology 6.47 5.63 4.60 4.24 4.22

Based on: 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19), 10-K (filing date: 2015-01-20), 10-K (filing date: 2014-01-21).

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of Adobe Inc.’s Annual Report.

2018 Calculations

3 BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= 9,362,114,000 ÷ 487,725,915 = 19.20

4 P/BV ratio = Share price ÷ BVPS
= 244.95 ÷ 19.20 = 12.76

Ratio Description The company
P/BV ratio The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company’s required rate of return and its actual rate of return. Adobe Inc.’s P/BV ratio increased from 2016 to 2017 and from 2017 to 2018.