Adobe Systems (NASDAQ: ADBE) is one of 65 publicly-traded companies in the “Application Software” industry, but how does it contrast to its rivals? We will compare Adobe Systems to similar companies based on the strength of its analyst recommendations, valuation, institutional ownership, profitability, earnings, dividends and risk.

Risk & Volatility

Adobe Systems has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, Adobe Systems’ rivals have a beta of 1.60, suggesting that their average share price is 60% more volatile than the S&P 500.

Institutional and Insider Ownership

87.5% of Adobe Systems shares are held by institutional investors. Comparatively, 68.6% of shares of all “Application Software” companies are held by institutional investors. 0.4% of Adobe Systems shares are held by company insiders. Comparatively, 15.7% of shares of all “Application Software” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Adobe Systems and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Adobe Systems 1 5 23 0 2.76
Adobe Systems Competitors 178 1503 2854 96 2.62

Adobe Systems currently has a consensus price target of $159.57, suggesting a potential upside of 5.33%. As a group, “Application Software” companies have a potential upside of 4.12%. Given Adobe Systems’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Adobe Systems is more favorable than its rivals.

Profitability

This table compares Adobe Systems and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Adobe Systems 23.06% 21.40% 12.51%
Adobe Systems Competitors -62.15% -91.89% -16.29%

Valuation & Earnings

This table compares Adobe Systems and its rivals revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Adobe Systems $6.90 billion $2.32 billion 47.49
Adobe Systems Competitors $761.46 million $137.65 million -12.15

Adobe Systems has higher revenue and earnings than its rivals. Adobe Systems is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Summary

Adobe Systems beats its rivals on 10 of the 13 factors compared.

Adobe Systems Company Profile

Adobe Systems Incorporated is a software company. The Company offers products and services used by professionals, marketers, knowledge workers, application developers, enterprises and consumers for creating, managing, delivering, measuring, optimizing and engaging with compelling content and experiences. It operates through three segments: Digital Media, Digital Marketing, and Print and Publishing. Its Digital Media segment provides tools and solutions that enable individuals, small and medium businesses and enterprises to create, publish, promote and monetize their digital content. Its Digital Marketing segment provides solutions and services for how digital advertising and marketing are created, managed, executed, measured and optimized. Its Print and Publishing segment addresses market opportunities ranging from the diverse authoring and publishing needs of technical and business publishing to its legacy type and original equipment manufacturer (OEM) printing businesses.

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