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Adobe Inc. (ADBE) vs The Estée Lauder Companies Inc. (EL): Which Is the Better Buy in 2026?

As of 2026-11-01, ADBE is undervalued at $250, with a DCF intrinsic value of $560 and a margin of safety of 55%. EL is overvalued at $109, with an intrinsic value of $42 and a margin of safety of -162%. Of the two, ADBE has the wider margin of safety.

ADBE
Adobe Inc.
$250.23
VS
EL
The Estée Lauder Companies Inc.
$109.23

Rewards

ADBE
  • ★Adobe Inc. has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
  • ★Gross margin of 89.3% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
  • ★Adobe Inc. scores 100/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
EL
  • ★Gross margin of 75.5% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.

Risks

ADBE
    EL
    • ⚠Despite buyback spending, shares outstanding increased in 3 out of 4 years — stock-based compensation is offsetting repurchases.
    • ⚠Trailing P/E of 218.5x is 93% above the historical average of 113.1x — the stock trades at a premium to its own history.
    • ⚠PEG ratio of 2.12 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.

    Key Valuation Metrics

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    ADBE
    EL
    Valuation
    $9.35B
    Free Cash Flow
    $1.81B
    9.60%
    FCF Yield
    4.58%
    13.97
    Trailing P/E
    218.46
    9.10
    Forward P/E
    27.70
    Quality & Moat
    38.51%
    ROIC
    6.38%
    61.90%
    ROE
    4.75%
    89.25%
    Gross Margin
    75.49%
    0.60
    PEG Ratio
    2.12
    Balance Sheet Safety
    0.10
    Net Debt / Equity
    1.51
    N/A
    Interest Coverage
    N/A
    0.12
    Net Debt / EBITDA
    2.34
    0.00%
    Dividend Yield
    1.28%
    ADBE: 10Ties: 1EL: 1
    ADBEEL

    Historical Fundamentals

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    ADBE

    Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

    EL

    Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

    Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.

    $1 Retained Earnings Test

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    ADBE
    $-0.60
    created per $1 retained over 3 years
    Market Cap Declined
    Σ Retained
    $18.12B
    Δ Market Cap
    $-10.93B
    Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
    > $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
    EL
    N/A
    Net losses over 3 years — test not applicable
    Company had negative cumulative retained earnings
    Σ Retained
    $-2.63B
    Δ Market Cap
    $-12.78B
    Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
    > $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer

    Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
    > $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer

    Discounted Cash Flow (DCF) Analysis

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    ADBE
    55.3% Margin of Safety
    Price is 55.3% below estimated fair value
    Current Price: $250.23
    Fair Value: $559.54
    Strongly undervalued
    Undervalued
    Fairly valued
    Overvalued
    Strongly overvalued
    EL
    161.8% Overvalued
    Price is 161.8% above estimated fair value
    Current Price: $109.23
    Fair Value: $41.73
    Strongly undervalued
    Undervalued
    Fairly valued
    Overvalued
    Strongly overvalued

    Reverse DCF — Market-Implied Growth

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    ADBE

    What growth rate is the market pricing in at $250?

    +1.5%
    Market-Implied Owner Earnings Growth
    Standard FCF implies -1.1%

    The market implies +1.5% Owner Earnings growth, below historical trends — potential opportunity.

    Standard FCF implies a more demanding -1.1%, reflecting heavy growth investment expected to generate future returns.

    EL

    What growth rate is the market pricing in at $109?

    +27.9%
    Market-Implied Owner Earnings Growth
    Standard FCF implies +10.8%

    The market implies +27.9% Owner Earnings growth, above historical trends.

    Standard FCF implies a demanding +10.8%, reflecting heavy growth investment.

    Economic Moat Score

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    ADBE
    100/100
    Wide Moat
    70+ Wide · 40-69 Narrow · <40 None

    Wide moat with strength across all dimensions. ROIC Consistency is the standout factor.

    Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.
    EL
    48/100
    Narrow Moat
    70+ Wide · 40-69 Narrow · <40 None

    Narrow moat with margin stability as the key competitive advantage. Improving roic consistency would strengthen the moat.

    Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.

    Forensic Accounting

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    ADBE
    -2.85
    Unlikely Manipulator
    Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

    M-Score Trend

    Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
    EL
    -2.75
    Unlikely Manipulator
    Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone
    Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.

    Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.

    Ownership Breakdown

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    ADBE
    Insiders 0.2%Institutions 89.0%Retail & Other 10.7%
    No. of Institutional Holders2,955
    High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.
    EL
    Insiders 0.3%Institutions 96.3%Retail & Other 3.4%
    No. of Institutional Holders1,314
    High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.

    High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.

    Insider Buying Activity

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    ADBE
    0
    Buys (3M)
    1
    Buys (12M)
    Total value (12M): $1.95M
    RICKS DAVID A
    Director
    $1.95M
    @ $194.51 · 2026-06-25
    DURN DANIEL JAMES
    Chief Financial Officer
    $507,758
    @ $390.58 · 2025-03-20
    RICKS DAVID A
    Director
    $998,946
    @ $443.98 · 2025-01-28
    Open market purchases · includes direct & indirect ownership · excludes option exercises
    EL
    0
    Buys (3M)
    0
    Buys (12M)
    FRIBOURG PAUL J
    Director
    $2.96M
    @ $65.00 · 2025-02-07
    FRIBOURG PAUL J
    Director
    $5.72M
    @ $65.80 · 2025-02-06
    SHRIVASTAVA AKHIL
    Chief Financial Officer
    $46,053
    @ $65.79 · 2025-02-05
    FRIBOURG PAUL J
    Director
    $5.02M
    @ $64.48 · 2024-11-19
    FRIBOURG PAUL J
    Director
    $9.86M
    @ $64.46 · 2024-11-18
    FRIBOURG PAUL J
    Director
    $10.05M
    @ $63.98 · 2024-11-14
    SHRIVASTAVA AKHIL
    Chief Financial Officer
    $65,000
    @ $65.00 · 2024-11-14
    Open market purchases · includes direct & indirect ownership · excludes option exercises

    Open market purchases · includes direct & indirect ownership · excludes option exercises.

    Insider Selling Activity

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    ADBE
    0
    Sells (3M)
    4
    Sells (12M)
    Total value (12M): $1.11M
    FORUSZ JILLIAN
    Officer
    $109,961
    @ $264.33 · 2026-07-29
    FORUSZ JILLIAN
    Officer
    $185,915
    @ $246.25 · 2026-04-30
    DURN DANIEL JAMES
    Chief Financial Officer
    $331,355
    @ $248.02 · 2026-04-20
    DURN DANIEL JAMES
    Chief Financial Officer
    $485,323
    @ $294.85 · 2026-01-27
    FORUSZ JILLIAN
    Officer
    $50,344
    @ $337.88 · 2025-10-31
    FORUSZ JILLIAN
    Officer
    $175,828
    @ $380.58 · 2025-05-02
    FORUSZ JILLIAN
    Officer
    $145,567
    @ $435.83 · 2025-01-28
    BELSKY SCOTT K
    Officer
    $2.05M
    @ $431.61 · 2025-01-27
    BANSE AMY L
    Director
    $333,300
    @ $550.00 · 2024-12-06
    Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
    EL
    2
    Sells (3M)
    9
    Sells (12M)
    Total value (12M): $1.02B
    LA LANDE RASHIDA K
    General Counsel
    $802,383
    @ $103.32 · 2026-08-28
    LA LANDE RASHIDA K
    General Counsel
    $553,896
    @ $99.55 · 2026-08-21
    LA LANDE RASHIDA K
    General Counsel
    $151,498
    @ $94.45 · 2025-11-26
    LAUDER JANE A
    Director and Beneficial Owner of more than 10% of a Class of Security
    $1.68M
    @ $94.38 · 2025-11-26
    WEBSTER MERIDITH P
    Officer
    $476,971
    @ $87.84 · 2025-11-18
    STERNLICHT BARRY S
    Director
    $364,749
    @ $91.83 · 2025-11-11
    LEONARD A LAUDER 2013 REVOCABLE TRUST
    Beneficial Owner of more than 10% of a Class of Security
    $249.91M
    @ $89.70 · 2025-11-06
    LAL 2015 ELF TRUST
    Trustee
    $508.60M
    @ $89.70 · 2025-11-06
    EVELYN H. LAUDER 2012 MARITAL TRUST TWO
    Trustee
    $255.22M
    @ $89.70 · 2025-11-06
    FORESTER LYNN
    Director
    $339,288
    @ $91.65 · 2025-08-29
    LA LANDE RASHIDA K
    General Counsel
    $589,594
    @ $91.88 · 2025-08-28
    LAUDER JANE A
    Director and Beneficial Owner of more than 10% of a Class of Security
    $1.39M
    @ $88.23 · 2025-08-21
    Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives

    Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.

    🎭 Mr. Market's Mood

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    ADBE
    FearGreed
    😐Neutral(42/100)

    "Market is pricing this stock without strong emotion in either direction"

    Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
    EL
    FearGreed
    😏Greed(63/100)

    "Market is optimistic — be cautious and ensure you have a margin of safety"

    Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

    Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

    ⚖️ Buffett Signal

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    ADBE
    ⚪Awaiting DCF Data

    The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

    DCF Margin of Safety: N/AMr. Market's Mood: Neutral (42)
    EL
    ⚪Awaiting DCF Data

    The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

    DCF Margin of Safety: N/AMr. Market's Mood: Greed (63)
    View ADBE Full AnalysisView EL Full Analysis

    Frequently Asked Questions: ADBE vs EL

    Is Adobe Inc. or The Estée Lauder Companies Inc. more undervalued in 2026?▼

    Based on our discounted cash flow model, ADBE trades at a 55.3% margin of safety (intrinsic value $560 vs. price $250), compared to EL's -161.8% margin of safety (intrinsic $42 vs. $109).

    Which stock has a wider economic moat, Adobe Inc. or The Estée Lauder Companies Inc.?▼

    ADBE scores 100/100 (Wide moat), while EL scores 48/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.

    Which company has better free cash flow, Adobe Inc. or The Estée Lauder Companies Inc.?▼

    Adobe Inc. (ADBE) generates a 9.6% free cash flow yield, compared to The Estée Lauder Companies Inc.'s 4.6%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.

    Which stock has higher return on invested capital, Adobe Inc. or The Estée Lauder Companies Inc.?▼

    ADBE earns 38.5% ROIC versus EL's 6.4%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.

    ADBE vs EL: Which Is the Better Buy in 2026? | SafetyMargin.io