Highly Regarded

Is Adobe Inc. (ADBE) Stock Undervalued or Overvalued?

Trailing-twelve-month multiples vs Technology sector peers in our coverage

84% Discount TTM fundamentals · sector averages from covered peers

ADBE trades at 13.1× TTM earnings — a 84% discount to its Technology sector average of 82.0× in our coverage.

The Numbers

P/E (TTM)

13.1×

Sector avg: 82.0×

P/S (TTM)

3.8×

Sector avg: 19.2×

Market Cap

$89.53B

EPS (TTM): $16.70

Revenue (TTM)

$23.77B

Net income: $7.13B

Technology Peer Comparison

How ADBE's multiples stack up against sector peers we cover. Click any peer for its own valuation breakdown.

Stock Price P/E (TTM)
ADBE This page $218.11 13.1×
NVDA $195.52 48.4×
AAPL $312.73 39.6×
MSFT $386.79 24.2×
AVGO $373.72 78.3×
AMD $551.70 208.2×
INTC $122.14 —
CSCO $113.98 44.0×
ORCL $143.82 33.3×
PLTR $132.53 308.2×
TXN $303.53 55.7×
QCOM $186.38 37.7×
CRM $165.63 24.0×

Is the Discount Justified?

July 6, 2026

Adobe's P/E of 13.1x is significantly below the Technology sector average of 76.3x. The company reported Q2 2026 revenue of $6.62 billion, beating expectations, and non-GAAP EPS of $5.96. Annualized Recurring Revenue (ARR) grew 12.5%, though adjusted for an acquisition, growth was 10.5%. Adobe maintains high gross margins, around 89%, and a stable non-GAAP operating margin of approximately 45%. The market appears to be applying a "disruption discount" due to concerns about generative AI and intensifying competition from rivals like Canva and Figma. However, management asserts that customers are integrating AI features into existing workflows, with AI-first ARR tripling year-over-year to over $500 million, though this is still a small portion of total revenue. The current P/E is substantially below its 5-year median P/E of 39.6x, suggesting a lower valuation relative to historical performance.

Sources

Frequently Asked Questions

Is ADBE overvalued or undervalued?
On trailing-twelve-month earnings, ADBE trades at 13.1x versus a Technology sector average of 82.0x in our coverage — a 84.1% discount. Whether that's justified depends on growth, margins, and risk; see the context above.
What does the P/E ratio tell you?
Price-to-earnings compares a company's share price with its per-share profits. A higher multiple means investors pay more per dollar of earnings — often for faster expected growth — while a lower one can signal slower growth or higher perceived risk.
Why compare against the sector average?
Valuation multiples vary structurally between industries — software typically trades richer than banks or energy. Comparing ADBE with its own Technology peers is more informative than comparing against the whole market.
Is a cheap stock automatically a good buy?
No. A discount can be justified by weak growth or elevated risk (a "value trap"), and a premium can be earned by quality and consistency. Valuation is one input — pair it with the fundamentals and the AI context on this page.

Methodology

Multiples are computed from trailing-twelve-month fundamentals (from company filings) and the latest share price: P/E is price ÷ diluted EPS, and P/S is market cap ÷ revenue. Sector averages use the Technology names in our 50-stock coverage with positive earnings — a deliberately like-for-like, if imperfect, benchmark.

Stocks with negative trailing earnings are compared on price-to-sales instead. Multiples update with prices and fundamentals; AI context refreshes weekly.

Not Financial Advice

This page is for education and information only. Indicators are mechanical calculations, AI commentary can contain errors, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a qualified financial advisor. See our full disclaimer.

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