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How Does Adobe Systems Compare to Its Peers?

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Adobe Systems and its peers

An analysis of Adobe Systems’ income statement in 3Q15 follows:

  • The gross profit margins of Adobe Systems (ADBE), Apple (AAPL), Microsoft (MSFT), Oracle (ORCL), and IBM (IBM) are 84.30%, 39.68%, 66.33%, 80.82%, and 49.92%, respectively.

An analysis of Adobe Systems’ balance sheet in 3Q15 follows:

  • The current ratios of Adobe Systems, Apple, Microsoft, Oracle, and IBM are 2.19, 1.09, 2.50, 4.13, and 1.27, respectively.

An analysis of Adobe Systems’ valuation follows:

  • The PE (price-to-earnings) ratios of Adobe Systems, Apple, Microsoft, Oracle, and IBM are 111.54x, 13.15x, 30.31x, 16.62x, and 9.87x, respectively.
  • The PBV (price-to-book value) ratios of Adobe Systems, Apple, Microsoft, Oracle, and IBM are 6.07x, 5.19x, 4.46x, 3.29x, and 10.63x, respectively.

According to the above findings, Adobe Systems was better than its peers based on the PE ratio, PBV ratio, and gross profit margin.

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ETFs that invest in Adobe Systems

The iShares S&P North American Technology-Software ETF (IGV) invests 8.20% of its holdings in Adobe Systems. IGV tracks a market-cap-weighted index of US and Canadian software companies.

The SPDR Morgan Stanley Technology ETF (MTK) invests 2.85% of its holdings in Adobe Systems. MTK tracks an equal-weighted index of US-listed large-cap electronics-based technology companies.

The First Trust NASDAQ-100 Technology Sector ETF (QTEC) invests 2.60% of its holdings in Adobe Systems. QTEC tracks an equal-weighted index of the largest NASDAQ-listed US technology stocks.

Adobe Systems compared to its ETFs

An analysis of Adobe Systems’ price movement follows:

  • The YTD price movements of Adobe Systems, IGV, MTK, and QTEC are 10.47%, 5.69%, -49.36%, and -5.91%, respectively.

An analysis of Adobe Systems’ valuation follows:

  • The PE ratios of Adobe Systems, IGV, MTK, and QTEC are 111.54x, 47.05x, 23.04x, and 18.69x, respectively.
  • The PBV ratios of Adobe Systems, IGV, MTK, and QTEC are 6.07x, 4.97x, 4.02x, and 3.67x, respectively.

According to the above findings, Adobe Systems is way ahead of its ETFs based on price movement and PE and PBV ratios.

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