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

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

85% Discount TTM fundamentals · sector averages from covered peers

ADBE trades at 15.1× TTM earnings — a 85% discount to its Technology sector average of 98.0× in our coverage.

The Numbers

P/E (TTM)

15.1×

Sector avg: 98.0×

P/S (TTM)

4.3×

Sector avg: 22.9×

Market Cap

$103.30B

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 $251.65 15.1×
NVDA $217.23 53.8×
AAPL $341.95 43.3×
MSFT $539.24 33.7×
AVGO $344.31 72.2×
AMD $562.16 212.1×
PLTR $200.48 466.2×
INTC $95.36 —
CSCO $109.85 42.4×
ORCL $134.50 31.1×
TXN $279.15 51.2×
CRM $246.71 35.8×
QCOM $178.39 36.0×

Is the Discount Justified?

October 4, 2026

Adobe Inc.'s P/E of 14.2x is substantially lower than the technology sector average of 91.7x. Despite this discount, the company reported a strong Q3 FY2026, with revenue growing 13% year-over-year to $6.76 billion and non-GAAP EPS rising 15%. Growth is fueled by its subscription model across Creative and Marketing Professionals, and Business Professionals & Consumers segments, which saw 13% and 16% subscription revenue growth, respectively. Adobe has also expanded its reach, surpassing one billion monthly active users, partly due to its freemium AI product strategy. While the company raised its full-year 2026 revenue and EPS guidance, increased operating expenses, particularly from AI inference costs impacting gross margins, could be a factor contributing to its valuation relative to the sector.

Sources

Frequently Asked Questions

Is ADBE overvalued or undervalued?
On trailing-twelve-month earnings, ADBE trades at 15.1x versus a Technology sector average of 98.0x in our coverage — a 84.6% 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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