Analog Devices (ADI) AI Stock Analysis

• Market Cap: $81.64B
• Dividend Yield: 2.28%
• Average Volume (3M): 3.95M
• Price to Earnings (P/E): 52.5
• Beta (1Y): 1.48
• Revenue Growth: -19.28%
• EPS Growth: -44.00%
• Country: US
• Employees: 24,000
• Sector: Technology
• Sector Strength: 40
• Industry: Semiconductors
• EPS (TTM): 3.13
• Shares Outstanding: 495,976,470
• 10 Day Avg. Volume: 4,109,450
• 30 Day Avg. Volume: 3,949,941
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 10.86
• Price to Cash Flow (P/CF): 22.50
• P/FCF Ratio: 25.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $264.69
• Price Target Upside: 54.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

Analog Devices receives a solid score due to its strong profitability and positive earnings call outlook. Technical indicators are neutral, and valuation suggests potential overvaluation, which slightly tempers the overall score. The company's robust performance in key segments and growth prospects in emerging markets bolster its appeal.

Positive Factors

Capital Returns

A new $10B buyback plan supports capital returns and the stock.

Growth Opportunities

Analog Devices, Inc. is well-positioned for growth recovery and free cash flow returns, with improved industrial bookings and specific automotive wins driving future sales growth.

Market Position

The company has a resilient position in the high-end product market in China, which remains promising despite global auto market softness.

Negative Factors

Consumer Electronics

Slowdown in consumer electronics demand due to weak consumer sentiment caused by inflation concerns, slower global economic growth, and geopolitical conflicts.

Macroeconomic Challenges

The company acknowledges macroeconomic uncertainty and a significant drop in quarterly revenue due to an inventory digestion period.

Market Uncertainty

There is uncertainty regarding the shape of growth in the automotive and industrial market recovery, despite expectations of a cyclical recovery.

Analog Devices Business Overview & Revenue Model

Company Description

Analog Devices, Inc. designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems that leverage analog, mixed-signal, and digital signal processing technologies. The company provides data converter products, which translate real-world analog signals into digital data, as well as translates digital data into analog signals; power management and reference products for power conversion, driver monitoring, sequencing, and energy management applications in the automotive, communications, industrial, and high-end consumer markets; and power ICs include performance, integration, and software design simulation tools for accurate power supply designs. It also offers high-performance amplifiers to condition analog signals; and radio frequency and microwave ICs to support cellular infrastructure; and microelectromechanical systems technology solutions, including accelerometers used to sense acceleration, gyroscopes for sense rotation, inertial measurement units to sense multiple degrees of freedom, and broadband switches for radio and instrument systems, as well as isolators. In addition, the company offers digital signal processing and system products for high-speed numeric calculations. It serves clients in the industrial, automotive, consumer, instrumentation, aerospace, and communications markets through a direct sales force, third-party distributors, and independent sales representatives in the United States, the rest of North and South America, Europe, Japan, China, and rest of Asia, as well as through its Website. Analog Devices, Inc. was incorporated in 1965 and is headquartered in Wilmington, Massachusetts.

How the Company Makes Money

Analog Devices generates revenue primarily through the design, manufacture, and sale of high-performance analog and mixed-signal integrated circuits. Key revenue streams include sales of products such as amplifiers, converters, and power management ICs, which are critical in processing real-world signals in electronic devices. The company serves a diverse set of industries, including industrial automation, automotive, telecommunications, healthcare, and consumer electronics, which helps stabilize earnings across economic cycles. ADI also forms strategic partnerships and collaborations with other technology companies to expand its market reach and enhance its product offerings. These partnerships can lead to joint developments and innovation, contributing to ADI's financial performance. Furthermore, the company's focus on research and development enables it to maintain a competitive edge by continually advancing its technology and addressing the evolving needs of its customers.

Analog Devices Financial Statement Overview

Summary

Analog Devices shows strong profitability with robust margins and a healthy balance sheet with low leverage and strong equity. Despite slightly negative revenue growth, the company maintains solid cash flow metrics, indicating good cash generation capability.

Income Statement

Gross profit margin for TTM (Trailing-Twelve-Months) is 53.09%, indicating strong profitability. However, revenue has decreased from the previous annual report, leading to a negative revenue growth rate of -0.95%. Net profit margin stands at 16.75%, reflecting solid bottom-line efficiency. The EBIT margin is 20.90%, and the EBITDA margin is 38.24%, showcasing robust operating performance.

Balance Sheet

The debt-to-equity ratio is 0.22, indicating low leverage and financial stability. Return on equity (ROE) is 4.46%, which suggests moderate efficiency in generating profit from equity. The equity ratio is 73.10%, reflecting a strong capital structure with substantial equity backing.

Cash Flow

Free cash flow growth rate is 3.91%, indicating positive cash generation but at a slower growth rate. The operating cash flow to net income ratio is 2.45, showing strong cash flow relative to net income. Free cash flow to net income ratio is 2.03, indicating efficient cash usage relative to profits.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
9.34B	9.43B	12.31B	12.01B	7.32B	5.60B
	Gross Profit
4.96B	5.38B	7.88B	7.53B	4.53B	3.69B
	EBIT
1.95B	2.03B	3.82B	3.28B	1.69B	1.50B
	EBITDA
3.57B	2.03B	6.15B	5.61B	2.60B	2.32B
	Net Income Common Stockholders
1.56B	1.64B	3.31B	2.75B	1.39B	1.22B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.69B	2.36B	958.06M	1.47B	1.98B	1.06B
	Total Assets
4.33B	48.23B	48.79B	50.30B	52.32B	21.47B
	Total Debt
400.63M	7.58B	7.01B	6.55B	6.77B	5.15B
	Net Debt
-669.37M	5.59B	6.06B	5.08B	4.79B	4.09B
	Total Liabilities
1.13B	13.05B	13.23B	13.84B	14.33B	9.47B
	Stockholders Equity
3.20B	35.18B	35.57B	36.47B	37.99B	12.00B
Cash Flow		Free Cash Flow
3.18B	3.12B	3.56B	3.78B	2.39B	1.84B
	Operating Cash Flow
3.84B	3.85B	4.82B	4.48B	2.74B	2.01B
	Investing Cash Flow
-1.08B	-1.10B	-1.27B	-657.37M	2.14B	-180.52M
	Financing Cash Flow
-1.71B	-1.71B	-4.06B	-4.29B	-3.96B	-1.42B

Analog Devices Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 171.34
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADI, the sentiment is Negative. The current price of 171.34 is below the 20-day moving average (MA) of 201.68, below the 50-day MA of 211.88, and below the 200-day MA of 218.64, indicating a bearish trend. The MACD of -4.25 indicates Positive momentum. The RSI at 36.73 is Neutral, neither overbought nor oversold. The STOCH value of 17.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ADI.

Analog Devices Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QCOM	76 Outperform	$140.97B	13.62	41.96%	2.67%	12.13%	36.17%
AMD	72 Outperform	$138.97B	83.37	2.89%	―	13.69%	91.75%
ADI	71 Outperform	$81.64B	52.49	4.43%	2.28%	-19.28%	-44.00%
NXPI	67 Neutral	$40.78B	16.35	28.16%	2.52%	-4.99%	-9.18%
TXN	65 Neutral	$137.75B	29.14	28.25%	3.51%	-10.72%	-26.60%
MRVL	62 Neutral	$42.81B	―	-6.26%	0.48%	4.71%	5.57%
Sector *	57 Neutral	$18.52B	9.81	-13.96%	2.71%	5.07%	-23.65%

Analog Devices Corporate Events

Analog Devices Announces Board Changes and Bylaw Amendment

Analog Devices, Inc. announced that James Champy will retire from its Board of Directors and not seek re-election at the 2025 annual meeting. Andrea F. Wainer has been appointed as an independent director and a member of the Nominating and Corporate Governance Committee, with compensation details outlined as per the company’s non-employee director program. Additionally, the company’s Bylaws have been amended to lower the shareholder ownership threshold required to call a special meeting from 80% to 25%. This change aims to streamline the process and minimize potential disruptions from frequent shareholder meetings.