Highly Regarded

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

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

82% Discount TTM fundamentals · sector averages from covered peers

ADBE trades at 14.2× TTM earnings — a 82% discount to its Technology sector average of 79.4× in our coverage.

The Numbers

P/E (TTM)

14.2×

Sector avg: 79.4×

P/S (TTM)

4.1×

Sector avg: 18.7×

Market Cap

$97.38B

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 $237.22 14.2×
NVDA $202.77 50.2×
AAPL $333.66 42.2×
MSFT $393.89 24.6×
AVGO $370.92 77.8×
AMD $495.65 187.0×
INTC $94.98 —
CSCO $111.92 43.2×
ORCL $126.41 29.3×
PLTR $132.35 307.8×
TXN $283.97 52.1×
QCOM $171.79 34.7×
CRM $170.83 24.8×

Is the Discount Justified?

July 12, 2026

Adobe Inc.'s P/E ratio of 13.4x is significantly below the technology sector average of 76.4x. This substantial discount occurs despite the company reporting record Q2 FY2026 revenue of $6.62 billion, a 13% year-over-year increase, and beating analyst expectations for both revenue and EPS. Adobe also raised its full-year FY2026 revenue and non-GAAP EPS targets, projecting 12% and 17% year-over-year growth, respectively. However, the termination of its $20 billion acquisition of Figma in December 2023 due to regulatory hurdles, incurring a $1 billion breakup fee, likely weighed on investor sentiment. Furthermore, concerns about AI-driven disruption potentially narrowing Adobe's competitive moat and impacting pricing, with AI-first Annual Recurring Revenue (ARR) still a small portion of the total, may also pressure its valuation.

Sources

Frequently Asked Questions

Is ADBE overvalued or undervalued?
On trailing-twelve-month earnings, ADBE trades at 14.2x versus a Technology sector average of 79.4x in our coverage — a 82.1% 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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