Asset analysis
Adobe had total assets of $29.78 billion and $27.17 billion as of December 1, 2023 and December 2, 2022, respectively.
Adobe reported $12.8 billion in goodwill at December 1, 2023 , and the amount of goodwill is very big, which mean that the company completed a lot of acquisitions in the past.
Acquiring is essential for Adobe’s expand.
Total current assets were $11.1 billion at December 1, 2023.
Total current liabilities were $8.25 billion at December 1, 2023.
The current ratio was 1.35 times for fiscal 2023.
The company’s liquidity is very good.
The amount of cash and cash equivalents was very big , and reached $7.14 billion as of December 1, 2023.
Among total current liabilities, deferred revenue was $5.8 billion at December 1, 2023.
Generally, a company had a lot of deferred revenues, indicating that company’s cash flow was very strong.
We look at the company’s cash flow statement, and it is true that Adobe’s cash flow is very good.
Total liabilities were $13.26 billion as of December 1, 2023.
The debt ratio was 44.5% for fiscal 2023.
Eliminating the factors of goodwill and deferred revenue, the balance sheet was rather healthy.
Profitability analysis
Adobe’s total revenue was $19.4 billion, $17.6 billion and $15.8 billion for fiscal 2023, 2022 and 2021, respectively.
The growth rate for Adobe was 10.2% and 11.4% for fiscal 2023 and 2022, respectively.
Operating income amounted to $6.65 billion, $6.1 billion and $5.8 billion in fiscal 2023, 2022 and 2021, respectively.
The company’s operating profit margin was 34.3%, 34.7% and 36.7% for fiscal 2023, 2022 and 2021, respectively.
Net income was $5.43 billion, $4.76 billion and $4.82 billion in fiscal 2023, 2022 and 2021, respectively.
Cash flow analysis
Net cash provided by operating activities was $7.3 billion, $7.8 billion and $7.2 billion in fiscal 2023, 2022 and 2021, respectively.
You could see that the quality of earnings is very high.
Repurchases of common stock were $4.4 billion, $6.55 billion and $3.95 billion in fiscal 2023, 2022 and 2021, respectively, though stock-based compensation was $1.72 billion, $1.44 billion and $1 billion in fiscal 2023, 2022 and 2021, respectively.
The amount of repurchasing stock was partly offset by stock-based compensation.
Stock-based compensation will reduce Adobe’s valuation.
Adobe ‘s results of operations for Q1 2024.
Total revenues were $5.18 billion and $4.66 billion in the months to March 1, 2024 and the March 3, 2023, respectively.
The revenues in Q1 2024 were up 11.16% year-on-year.
Net cash provided by operating activities was $1.17 billion and $1.7 billion for Q1 2024 and Q1 2023,respectively.con
Conclusion
Adobe’s profitability is very strong, and cash flow is very good.
Stock-based compensation is disadvantageous for shareholders.
Today, Adobe stock price is $492.27 per share, which is equivalent to $220.54 billion in market capitalization.
We maintain that the reasonable valuation is about $100 billion.
Disclaimer: The content is for reference only and does not constitute investment advice.
Introduction
Adobe is a global technology company with a mission to change the world through personalized digital experiences. For over four decades, Adobe’s innovations have transformed how individuals, teams, businesses, enterprises, institutions, and governments engage and interact across all types of media. Our products, services and solutions are used around the world to imagine, create, manage, deliver, measure, optimize and engage with content across surfaces and fuel digital experiences. We have a diverse user base that includes consumers, communicators, creative professionals, developers, students, small and medium businesses and enterprises. We are also empowering creators by putting the power of artificial intelligence (“AI”) in their hands, and doing so in ways we believe are responsible. Our products and services help unleash creativity, accelerate document productivity and power businesses in a digital world.
Our business is organized into three reportable segments:
Digital Media;
Digital Experience; and
Publishing and Advertising.
