DCF Studio

    ADBE · NMS · Technology

    Adobe Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 294.51

    Market price

    USD 251.47

    Implied upside

    +17.1%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-11-30

    AdjustedReported capital expenditure averages 1.49% of revenue against depreciation of 4.20%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 4.20% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 294.51+17.1%
    Exit multiple
    USD 313.58+24.7%
    Market price
    USD 251.47

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn6bn11bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 26.6bnUSD 29.0bnUSD 31.4bnUSD 33.8bnUSD 36.0bnUSD 38.1bnUSD 40.0bnUSD 41.7bnUSD 43.1bnUSD 44.2bn+5.8%
    EBITUSD 9.4bnUSD 10.3bnUSD 11.1bnUSD 12.0bnUSD 12.7bnUSD 13.5bnUSD 14.2bnUSD 14.7bnUSD 15.2bnUSD 15.6bn+5.8%
    NOPATUSD 7.5bnUSD 8.2bnUSD 8.9bnUSD 9.6bnUSD 10.2bnUSD 10.8bnUSD 11.3bnUSD 11.8bnUSD 12.2bnUSD 12.5bn+5.8%
    Add depreciation & amortisationUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.5bnUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.8bnUSD 1.9bn+5.8%
    Less capital expenditureUSD -1.1bnUSD -1.3bnUSD -1.5bnUSD -1.7bnUSD -1.9bnUSD -2.1bnUSD -2.3bnUSD -2.5bnUSD -2.7bnUSD -2.9bn+11.3%
    Capex, % of revenue4.2%4.5%4.7%5.0%5.3%5.5%5.8%6.1%6.4%6.6%-
    Less increase in working capitalUSD -250.9mUSD -214.6mUSD -212.9mUSD -207.6mUSD -198.3mUSD -185.1mUSD -168.0mUSD -147.1mUSD -122.7mUSD -95.2m-10.2%
    Free cashflow to firmUSD 7.3bnUSD 7.9bnUSD 8.5bnUSD 9.1bnUSD 9.6bnUSD 10.1bnUSD 10.5bnUSD 10.9bnUSD 11.1bnUSD 11.3bn+5.0%
    Discount factor0.95420.86880.79100.72020.65580.59710.54370.49500.45070.4104-
    Present valueUSD 6.9bnUSD 6.9bnUSD 6.7bnUSD 6.5bnUSD 6.3bnUSD 6.0bnUSD 5.7bnUSD 5.4bnUSD 5.0bnUSD 4.7bn-
    Present Value Of The ForecastUSD 60.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.257Reported 1.383, pulled toward 1.0 (Blume)
    Cost of equity10.21%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 33.1x interest cover. Book interest / average debt was lower, at 4.1%.
    Market capitalisationUSD 97.9bn93.6% of capital
    Total debtUSD 6.6bn6.4% of capital, book value as a proxy
    Tax rate20.0%Effective, capped at statutory
    WACC9.83%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 294.51

    52% of EV

    Forecast FCFF, final year
    USD 11.3bn
    Capex at depreciation, working capital in reinvestment
    USD 12.5bn
    Less reinvestment at g/ROIC (8.6% of NOPAT)
    USD -1.1bn
    Capitalised
    USD 11.4bn
    ROIC (reported)
    29.1%
    Terminal value, undiscounted
    USD 159.8bn
    Terminal value, discounted
    USD 65.6bn
    Enterprise value
    USD 125.8bn
    Less net debt
    USD 53.0m
    Equity value
    USD 125.8bn

    Exit at 10.3x EBITDA

    Value per shareUSD 313.58

    55% of EV

    Terminal value, undiscounted
    USD 179.7bn
    Terminal value, discounted
    USD 73.7bn
    Enterprise value
    USD 134.0bn
    Less net debt
    USD 53.0m
    Equity value
    USD 133.9bn

    Spread between methods: 6%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.83%373.99388.16405.20425.99451.85
    8.83%321.76330.64341.08353.49368.44
    9.83%282.18287.88294.50302.24311.36
    10.83%251.16254.88259.15264.09269.83
    11.83%226.22228.64231.41234.59238.27

    Outlined: this model. Green text: above today's price of 251.47. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year10.5%6.4%4.4%
    EBIT margin36.6%35.4%30.3%
    Discount rate-9.8%11.1%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.