As of April 3, 2026, Adobe Inc's estimated intrinsic value ranges from $185.74 to $357.40 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $357.40 | +47.1% |
| Discounted Cash Flow (5Y) | $318.19 | +31.0% |
| Dividend Discount Model (Multi-Stage) | $224.47 | -7.6% |
| Dividend Discount Model (Stable) | $252.29 | +3.9% |
| Earnings Power Value | $185.74 | -23.5% |
Is Adobe Inc (ADBE) undervalued or overvalued?
With the current market price at $242.92, the stock appears to be moderately undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Adobe Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.98 | 1.07 |
| Cost of equity | 8.4% | 10.9% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 19.2% | 19.9% |
| Debt/Equity ratio | 0.06 | 0.06 |
| After-tax WACC | 8.1% | 10.4% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $318 | $130,486M | 74.8% |
| 10-Year Growth | $357 | $146,468M | 57.1% |
| 5-Year EBITDA | $375 | $153,507M | 78.6% |
| 10-Year EBITDA | $405 | $165,717M | 62.1% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $6,977M |
| Discount Rate (WACC) | 10.4% - 8.1% |
| Enterprise Value | $66,854M - $86,137M |
| Net Debt | $779M |
| Equity Value | $66,075M - $85,358M |
| Outstanding Shares | 408M |
| Fair Value | $162 - $209 |
| Selected Fair Value | $185.74 |
| Metric | Value |
|---|---|
| Market Capitalization | $99024M |
| Enterprise Value | $99803M |
| Trailing P/E | 13.74 |
| Forward P/E | 13.00 |
| Trailing EV/EBITDA | 15.40 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.06 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $107.22 |
| Discounted Cash Flow (5Y) | 25% | $79.55 |
| Dividend Discount Model (Multi-Stage) | 20% | $44.89 |
| Dividend Discount Model (Stable) | 15% | $37.84 |
| Earnings Power Value | 10% | $18.57 |
| Weighted Average | 100% | $288.08 |
Based on our comprehensive valuation analysis, Adobe Inc's intrinsic value is $288.08, which is approximately 18.6% above the current market price of $242.92.
Key investment considerations:
Given these factors, we believe Adobe Inc is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.