Adobe Trades at 9.9x Forward Earnings. Its $428 Analyst Target Doesn't Check Out.
Adobe's $428 aggregate price target is quarantined for failing internal checks. The real firm-level average across 20 analysts is $248, below the $272 stock. Consensus is Neutral, conviction is 48%, and three analysts downgraded last window.
Adobe's forward PE
9.9x
A cloud-software franchise growing revenue 12.7% trades at 9.9x forward earnings — a multiple usually reserved for businesses in decline. The $428 analyst target that makes it look like a bargain is quarantined; the real firm-level average is $248, below the stock price. Wall Street's consensus is already Neutral, not Strong Buy.
The contradiction
The $428 target is quarantined — the real firm-level average is $248, below the stock. The single-digit PE says the market already priced in the earnings slowdown the analysts are now flagging.
What the headline says
The story the screener tells
Neutral consensus, $428 aggregate mean target above the stock, 27 analysts covering a software franchise
What the data says
What the firm-level data actually says
Aggregate target quarantined for failing internal checks; firm-derived mean $248 is below the $272 price; 3 downgrades vs 1 upgrade; 9.9x forward PE with earnings growth of just 7.9% lagging revenue growth of 12.7%
ADBE
% change since Jul 13, vs SPY
| Date | Close ($) | 20d MA MA ($) | SPY (% chg) |
|---|---|---|---|
| Jul 13 | $231 | — | 0% |
| Jul 14 | $221 | — | +0.4% |
| Jul 15 | $225 | — | +0.8% |
| Jul 16 | $235 | — | +0.2% |
| Jul 17 | $237 | — | −0.8% |
| Jul 20 | $235 | — | −0.9% |
| Jul 21 | $227 | — | −0.1% |
| Jul 22 | $218 | — | −0.2% |
| Jul 23 | $212 | — | −1.5% |
| Jul 24 | $225 | — | −1.4% |
| Jul 27 | $238 | — | −1.3% |
| Jul 28 | $249 | — | −1.1% |
| Jul 29 | $263 | — | −2.6% |
| Jul 30 | $248 | — | −1% |
| Jul 31 | $250 | — | −0.3% |
| Aug 3 | $251 | — | +1.1% |
| Aug 4 | $257 | — | +3% |
| Aug 5 | $259 | — | +2.8% |
| Aug 6 | $260 | — | +2.6% |
| Aug 7 | $265 | $240 | +3.2% |
| Aug 10 | $273 | $243 | +3.2% |
| Aug 11 | $264 | $245 | +2.9% |
| Aug 12 | $259 | $246 | +3.1% |
| Aug 13 | $270 | $248 | +3.8% |
| Aug 14 | $264 | $249 | +3.6% |
| Aug 17 | $254 | $250 | +3.1% |
| Aug 18 | $263 | $252 | +2.4% |
| Aug 19 | $272 | $255 | +2.7% |
| Aug 20 | $272 | $258 | +1.8% |
| Aug 21 | $274 | $260 | +2.2% |
vs 20d MA
+5.1%
20d volatility
50.2%
vs SPY (20d)
+11.4%
View as table
| Date | Close ($) | 20d MA MA ($) | SPY (% chg) |
|---|---|---|---|
| Jul 13 | $231 | — | 0% |
| Jul 14 | $221 | — | +0.4% |
| Jul 15 | $225 | — | +0.8% |
| Jul 16 | $235 | — | +0.2% |
| Jul 17 | $237 | — | −0.8% |
| Jul 20 | $235 | — | −0.9% |
| Jul 21 | $227 | — | −0.1% |
| Jul 22 | $218 | — | −0.2% |
| Jul 23 | $212 | — | −1.5% |
| Jul 24 | $225 | — | −1.4% |
| Jul 27 | $238 | — | −1.3% |
| Jul 28 | $249 | — | −1.1% |
| Jul 29 | $263 | — | −2.6% |
| Jul 30 | $248 | — | −1% |
| Jul 31 | $250 | — | −0.3% |
| Aug 3 | $251 | — | +1.1% |
| Aug 4 | $257 | — | +3% |
| Aug 5 | $259 | — | +2.8% |
| Aug 6 | $260 | — | +2.6% |
| Aug 7 | $265 | $240 | +3.2% |
| Aug 10 | $273 | $243 | +3.2% |
| Aug 11 | $264 | $245 | +2.9% |
| Aug 12 | $259 | $246 | +3.1% |
| Aug 13 | $270 | $248 | +3.8% |
| Aug 14 | $264 | $249 | +3.6% |
| Aug 17 | $254 | $250 | +3.1% |
| Aug 18 | $263 | $252 | +2.4% |
| Aug 19 | $272 | $255 | +2.7% |
| Aug 20 | $272 | $258 | +1.8% |
| Aug 21 | $274 | $260 | +2.2% |
Chapter 01
The $428 target that fails its own check
The aggregate mean target of $428.25 is quarantined — it fails the provider's internal consistency check. The firm-derived mean across 20 analysts is $248.25, which is below the $272.47 stock price. The low is $190 and the high is $379.
The number a screener surfaces is $428 — well above the $272 price — but that aggregate is quarantined for failing its own internal consistency check and should not be cited. Recompute from the 20 firms with a live rating and the average is $248, below the $272 stock; the firm-level range spans $190 to $379, with the stock sitting between the mean ($248) and the high ($379). A target below the price is not a buy signal — it is a statement that the analyst corps, on average, expects the stock to fall.
"A price target below the stock price is not a buy signal — it is a statement that the analyst corps expects the stock to fall."
Adobe price targets: aggregate vs firm-level
| Name | Value ($) | Tone |
|---|---|---|
| Firm low | $190 | negative |
| Firm-derived mean | $248 | highlight |
| Price | $272 | warning |
| Firm high | $379 | neutral |
| Quarantined aggregate | $428 (quarantined) | negative |
View as table
| Name | Value ($) | Tone |
|---|---|---|
| Firm low | $190 | negative |
| Firm-derived mean | $248 | highlight |
| Price | $272 | warning |
| Firm high | $379 | neutral |
| Quarantined aggregate | $428 (quarantined) | negative |
Source: MarketDecode analyst snapshot, Aug 2026
Quarantined aggregate
$428fails internal consistency check — do not cite
Firm-derived mean
$24820 analysts, below the $272 price
Firm-level range
$190–$379firm-derived range $190–$379; Goldman at the low, $379 firm-derived high (20-firm range)
Chapter 02
Single-digit forward PE for a software franchise
Adobe's 9.9x forward earnings is below its Software-Application peer Salesforce (13.3x) and a fraction of ecosystem names like Microsoft (20.5x) and Apple (33.2x). The PEG ratio of 0.64 says the stock is cheap even adjusted for growth.
A forward PE under 10 for a profitable software company with 89% gross margins is anomalous. Against Salesforce — the only other Software-Application name in the scanner and a true peer — Adobe's 9.9x is below CRM's 13.3x. Microsoft (20.5x) and Apple (33.2x) are shown as ecosystem contrasts, not peers, because they operate different business models at structurally different margin profiles. Adobe's PEG ratio of 0.64 reinforces the picture: on a growth-adjusted basis, the stock is priced as if earnings are contracting, not growing 7.9%.
Forward PE: Adobe vs software peer and ecosystem
| Name | Value (x) | Tone |
|---|---|---|
| ADBE | 9.9x | highlight |
| CRM | 13.3x | positive |
| MSFT | 20.5x | neutral |
| AAPL | 33.2x | warning |
View as table
| Name | Value (x) | Tone |
|---|---|---|
| ADBE | 9.9x | highlight |
| CRM | 13.3x | positive |
| MSFT | 20.5x | neutral |
| AAPL | 33.2x | warning |
Source: Company fundamentals, Aug 2026 (forward price-to-earnings)
ADBE forward PE
9.9xbelow CRM, MSFT, and AAPL; 89.4% gross margins, 35.3% operating margins
Software peer
CRM 13.3xsame industry: Software - Application
PEG ratio
0.64cheap even adjusted for growth
Chapter 03
Revenue hits records. Earnings don't.
Q2 FY2026 revenue of $6.62B is the highest of the last five quarters, but EPS peaked a quarter earlier at $4.60 (Q1 FY2026) and fell to $4.25. Revenue growth is 12.7%; earnings growth is just 7.9% — the gap is margin compression.
Adobe's top line is not the problem. The five reported quarters from Q1 FY2025 to Q2 FY2026 are sequentially higher, from $5.87B to $6.62B, with Q2 FY2026 the highest in the series. But EPS peaked at $4.60 in Q1 FY2026 then dropped to $4.25 — revenue is growing 12.7% while earnings grow only 7.9%, a gap that signals margin pressure despite the 89.4% gross-margin franchise.
"Revenue is growing 12.7% while earnings grow 7.9% — the gap is the margin story the PE already prices in."
Adobe quarterly EPS: peaked, then slipped
| Name | Value ($) |
|---|---|
| Q1 FY25 | $3.9 |
| Q2 FY25 | $4.2 |
| Q3 FY25 | $4.5 |
| Q1 FY26 | $4.6 |
| Q2 FY26 | $4.3 |
View as table
| Name | Value ($) |
|---|---|
| Q1 FY25 | $3.9 |
| Q2 FY25 | $4.2 |
| Q3 FY25 | $4.5 |
| Q1 FY26 | $4.6 |
| Q2 FY26 | $4.3 |
Source: Company fundamentals, Aug 2026
Revenue high
$6.62BQ2 FY2026 — five-quarter high
EPS peak
$4.60Q1 FY2026 — one quarter before the revenue high
Earnings growth
7.9%vs 12.7% revenue growth — margin compression
Chapter 04
Wall Street turned cautious: three downgrades, Neutral consensus
Adobe's consensus is Neutral — not Strong Buy like most large-cap software. Conviction is 48.1%, smartScore is 6, and three analysts downgraded in the last window versus one upgrade. Goldman Sachs rates Sell at $190; B of A rates Underperform at $220.
The consensus label is Neutral, not Strong Buy. Only 48.1% of 27 analysts are at Buy or equivalent, with 12 holds and 2 sells; three downgrades hit in the recent window against one upgrade. Goldman Sachs maintains Sell at $190; B of A Securities maintains Underperform at $220. The smartScore of 6 is middling — below MSFT's 8 and AAPL's 8 in the scanner.
Adobe analyst ratings: 13 buy, 12 hold, 2 sell
| Name | Value (analysts) | Tone |
|---|---|---|
| Buy | 13 | positive |
| Hold | 12 | neutral |
| Sell | 2 | negative |
View as table
| Name | Value (analysts) | Tone |
|---|---|---|
| Buy | 13 | positive |
| Hold | 12 | neutral |
| Sell | 2 | negative |
Source: MarketDecode analyst snapshot, Aug 2026
Consensus
Neutral13 buy / 12 hold / 2 sell, 48.1% conviction
Recent actions
3 downgradesvs 1 upgrade (HSBC to Buy $308)
SmartScore
6 / 10middling — below MSFT's 8 and AAPL's 8 in the scanner
Chapter 05
Options traders are bullish. Analysts aren't.
Adobe's options flow is bullish — putCallRatio of 0.37, 53 bullish trades vs 23 bearish, 73 calls vs 27 puts. But the signal engine's overall direction is neutral, and the analyst consensus is Neutral. The two camps disagree.
The options tape tells a more optimistic story than the analyst tape. Adobe's putCallRatio of 0.37 is firmly bullish, with 53 bullish trades against 23 bearish and 73 calls against 27 puts. Salesforce (the peer) sits at 0.64 and Microsoft (ecosystem) at 0.61, yet the signal engine synthesizes all factors into a neutral direction. The options crowd is betting the selloff overshot; the analyst corps is not.
"The options crowd is betting the selloff overshot. The analyst corps is not. One of them is wrong by the next earnings print."
Put/call ratio: Adobe vs peer and ecosystem
| Name | Value | Band |
|---|---|---|
| ADBE | 0 | Bullish |
| MSFT | 1 | Neutral |
| CRM | 1 | Neutral |
View as table
| Name | Value | Band |
|---|---|---|
| ADBE | 0 | Bullish |
| MSFT | 1 | Neutral |
| CRM | 1 | Neutral |
Source: MarketDecode options flow, Aug 2026
ADBE put/call
0.3753 bullish vs 23 bearish trades
CRM (peer)
0.64peer — Strong Buy consensus, neutral signal engine
Signal direction
neutralengine synthesizes to neutral despite bullish options
Chapter 06
Cheap and growing — but the market isn't paying up
Plotted on forward PE vs revenue growth, Adobe lands in the cheap-and-growing quadrant alongside Salesforce. Microsoft and Apple sit in the expensive-and-faster zone. The market is pricing Adobe as if growth is stalling — but revenue just hit a record.
Plotted on forward PE vs revenue growth, Adobe and Salesforce both land in the cheap-and-growing zone — a lower multiple than CRM, MSFT, and AAPL, with double-digit growth. Microsoft (20.5x, 17.7% growth) and Apple (33.2x, 16.4% growth) sit in the expensive-and-faster quadrant, which is why they are ecosystem contrasts rather than peers. Adobe's revenue just hit a five-quarter high and its PEG is 0.64, yet the market assigns it a lower multiple than its software peer. The next earnings print is the tiebreaker.
Forward PE vs revenue growth: Adobe vs peer and ecosystem
| Name | Forward PE (x) | Revenue growth (%) |
|---|---|---|
| ADBE | 9.9x | +12.7% |
| CRM | 13.3x | +13.3% |
| MSFT (ecosystem) | 20.5x | +17.7% |
| AAPL (ecosystem) | 33.2x | +16.4% |
View as table
| Name | Forward PE (x) | Revenue growth (%) |
|---|---|---|
| ADBE | 9.9x | +12.7% |
| CRM | 13.3x | +13.3% |
| MSFT (ecosystem) | 20.5x | +17.7% |
| AAPL (ecosystem) | 33.2x | +16.4% |
Source: Company fundamentals, Aug 2026
ADBE — low PE, growing
9.9x / 12.7%PEG 0.64 — cheap-and-growing ADBE
Peer
CRM13.3x PE, 13.3% growth — peer — Strong Buy consensus, neutral signal engine
Ecosystem contrast
AAPL 33.2xAAPL 33.2x, 16.4% growth — ecosystem, not a peer
Resolution window — 1 month
What would confirm or invalidate this read
Confirmation
By Adobe's Q3 FY2026 earnings, estimated around 2026-09-10 (not yet confirmed): (a) EPS reaccelerates above the $4.60 prior peak (Q1 FY2026); (b) revenue growth holds above 12.7% and quarterly revenue exceeds the $6.62B Q2 FY2026 high; (c) at least one analyst upgrade appears in the next window; (d) the firm-derived mean target rises above the $272 stock price and at least one firm revises its target up.
Invalidation
By the same window: (a) EPS declines further from the $4.25 Q2 FY2026 print; (b) revenue growth decelerates below the 11.6% current-year estimate; (c) additional downgrades hit and the firm-derived mean falls toward the $190 low (Goldman Sachs); (d) the stock breaks below the $190 firm-derived low.