Is Adobe, Inc. overvalued or undervalued?

As of 21 November 2025, Adobe, Inc. has moved from a very attractive to an attractive valuation grade. The company appears to be overvalued based on its current metrics, with a P/E ratio of 35, a price to book value of 18.41, and an EV to EBITDA ratio of 26.66. In comparison, Microsoft Corp. has a P/E of 36.17 and Salesforce, Inc. has a P/E of 33.28, indicating that Adobe's valuation is on the higher end relative to its peers.
Recent performance shows that Adobe's stock has underperformed against the S&P 500, with a year-to-date return of -27.10% compared to the S&P 500's 12.26%. This trend continues over longer periods, with a one-year return of -35.73% versus the S&P 500's 11.00%. Overall, these factors suggest that Adobe's current valuation may not be justified given its recent stock performance and relative metrics.