MeritValue

ADOBE INC.

ADBEdata completeness 100%19 fiscal years on file

Data notes: no data for concept 'investmentsAtFairValue'; no data for concept 'netInvestmentIncome'; no data for concept 'dividendsPaid'

The thesis, from the filings

ADOBE INC. earns about 42% on invested capital, far above its ~9% cost of capital, and has bought back 11% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $130.51 and $337.42 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$15.8B1$17.6B2$19.4B3$21.5B3$23.8B3
Net income$4.82B4$4.76B5$5.43B6$5.56B6$7.13B6
Operating cash flow$7.23B7$7.84B8$7.3B9$8.06B9$10B9
Capital expenditure$348M10$442M11$360M12$183M12$179M12
Free cash flow (derived)$6.88B7$7.4B8$6.94B9$7.87B9$9.85B9
Total debt$4.12B13$4.13B14$3.63B15$7.13B16$6.21B16
Cash & equivalents$3.84B17$4.24B18$7.14B19$7.61B20$5.43B20
Diluted shares481.0M470.9M459.1M449.7M427.0M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$272.2
your share of equity
Profit it earned you last year
$166.98
Free cash flow it threw off
$230.73
Debt you’d be carrying
$145.43

10 shares is a claim on $272.2 of net worth that earned you $166.98 and generated $230.73 of cash last year, against $145.43 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
42% avg · 5y
FY21 33%FY22 35%FY23 42%FY24 41%FY25 57%

It earned about 42% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−11% shares · 5y

Share count is down 11% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has risen 51% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.5.0

The 3 estimate methods that apply put fair value between $130.51 and $337.42 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$337.42
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth4.6%
  • fcfBase$7.87B
DCF · Growth Exit 5Y
$315.31
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth4.6%
  • fcfBase$7.87B
Earnings Power Value
$130.51
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$5.43B
  • growthAssumed0.0%
Graham Number
$102.83
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years4.6%
Discount rate (WACC)9.02%
Terminal growth2.5%
At your growth, a share is worth $315.31
The three cases
Bear0.0%$258.13
Base4.6%$315.31
Bull9.6%$389.38

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 4.6%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-03 · accession 0000796343-24-000006 (Revenues)
  2. 10-K · period ending 2022-12-02 · accession 0000796343-25-000004 (Revenues)
  3. 10-K · period ending 2023-12-01 · accession 0000796343-26-000003 (Revenues)
  4. 10-K · period ending 2021-12-03 · accession 0000796343-24-000006 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-02 · accession 0000796343-25-000004 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-01 · accession 0000796343-26-000003 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-03 · accession 0000796343-24-000006 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-02 · accession 0000796343-25-000004 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-01 · accession 0000796343-26-000003 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-03 · accession 0000796343-24-000006 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-02 · accession 0000796343-25-000004 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-01 · accession 0000796343-26-000003 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-03 · accession 0000796343-23-000007 (LongTermDebt)
  14. 10-K · period ending 2022-12-02 · accession 0000796343-24-000006 (LongTermDebt)
  15. 10-K · period ending 2023-12-01 · accession 0000796343-25-000004 (LongTermDebt)
  16. 10-K · period ending 2024-11-29 · accession 0000796343-26-000003 (LongTermDebtCurrent)
  17. 10-K · period ending 2021-12-03 · accession 0000796343-23-000007 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-02 · accession 0000796343-24-000006 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-01 · accession 0000796343-25-000004 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-11-29 · accession 0000796343-26-000003 (CashAndCashEquivalentsAtCarryingValue)