Is Adobe, Inc. overvalued or undervalued?

As of 12 September 2025, the valuation grade for Adobe, Inc. has moved from attractive to very expensive, indicating a shift towards overvaluation. The company appears to be overvalued based on its P/E ratio of 35, which is higher than the industry average P/E, and an EV to EBITDA ratio of 26.66, reflecting elevated valuation metrics. Additionally, the PEG ratio stands at 1.18, suggesting that the stock may not be justified by its growth prospects compared to its price.
In comparison to peers, Adobe's P/E ratio is lower than Microsoft Corp.'s at 36.17, but significantly higher than Oracle Corp.'s at 51.69, indicating a mixed competitive landscape. The company's recent stock performance has been underwhelming, with a year-to-date return of -17.37% compared to the S&P 500's positive return of 12.22%, further reinforcing the notion of overvaluation. Overall, Adobe, Inc. is currently overvalued in the market.