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. Key ratios include a P/E ratio of 35, an EV to EBITDA of 26.66, and a PEG ratio of 1.18. In comparison to peers, Microsoft Corp. has a P/E of 36.17, while Salesforce, Inc. shows a more favorable EV to EBITDA of 16.87, indicating that Adobe's valuation may not be justified relative to its competitors.
Recent stock performance has been disappointing, with a year-to-date return of -28.32%, significantly underperforming the S&P 500's return of 12.26% during the same period. This stark contrast in returns further reinforces the notion that Adobe may be overvalued in the current market environment.