Analog Devices (ADI) AI Stock Analysis

• Market Cap: $112.18B
• Dividend Yield: 1.63%
• Average Volume (3M): 4.22M
• Price to Earnings (P/E): 72.1
• Beta (1Y): 1.29
• Revenue Growth: -19.28%
• EPS Growth: -44.00%
• Country: US
• Employees: 24,000
• Sector: Technology
• Sector Strength: 48
• Industry: Semiconductors and Equipment
• EPS (TTM): 3.13
• Shares Outstanding: 495,976,470
• 10 Day Avg. Volume: 4,627,341
• 30 Day Avg. Volume: 4,221,504
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 12.01
• Price to Cash Flow (P/CF): 24.90
• P/FCF Ratio: 28.70
• 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: $270.33
• Price Target Upside: 17.81% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

Analog Devices exhibits strong financial performance with robust margins and a stable balance sheet. The technical analysis suggests an upward trend but highlights potential overbought conditions. While the high P/E ratio raises valuation concerns, the positive earnings call outlook with strategic growth and shareholder-friendly policies, such as dividend increases and share repurchases, support the overall positive sentiment.

Positive Factors

Capital Returns

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

Industrial and Automotive Growth

The improvement across the business is providing increased conviction in a return to the long-term growth model of 7-10% with the emergence of a new cycle.

Negative Factors

Consumer Electronics Demand

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

Analog Devices Business Overview & Revenue Model

Company Description

Analog Devices, Inc. (ADI) is a multinational semiconductor company specializing in data conversion, signal processing, and power management technology. Operating in the technology and electronics sector, ADI designs, manufactures, and markets a broad portfolio of high-performance analog, mixed-signal, and digital signal processing integrated circuits (ICs) used in various applications. These include industrial, automotive, communications, healthcare, and consumer electronics, providing essential components for modern electronic devices.

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 demonstrates strong profitability with robust margins and a healthy balance sheet characterized by low leverage and strong equity. Although revenue growth is slightly negative, the company maintains solid cash flow metrics, indicating good cash generation capability. The overall financial health is stable, with some room for improvement in revenue growth.

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
4.55B	9.43B	12.31B	12.01B	7.32B	5.60B
	Gross Profit
3.07B	5.38B	7.88B	7.53B	4.53B	3.69B
	EBIT
1.37B	2.03B	3.82B	3.28B	1.69B	1.50B
	EBITDA
1.98B	2.03B	6.15B	5.61B	2.60B	2.32B
	Net Income Common Stockholders
1.09B	1.64B	3.31B	2.75B	1.39B	1.22B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.72B	2.36B	958.06M	1.47B	1.98B	1.06B
	Total Assets
47.97B	48.23B	48.79B	50.30B	52.32B	21.47B
	Total Debt
7.57B	7.58B	7.01B	6.55B	6.77B	5.15B
	Net Debt
5.22B	5.59B	6.06B	5.08B	4.79B	4.09B
	Total Liabilities
12.90B	13.05B	13.23B	13.84B	14.33B	9.47B
	Stockholders Equity
35.07B	35.18B	35.57B	36.47B	37.99B	12.00B
Cash Flow		Free Cash Flow
1.37B	3.06B	3.56B	3.78B	2.39B	1.84B
	Operating Cash Flow
1.60B	4.28B	4.82B	4.48B	2.74B	2.01B
	Investing Cash Flow
-229.43M	-1.21B	-1.27B	-657.37M	2.14B	-180.52M
	Financing Cash Flow
-1.57B	0.00	-4.06B	-4.29B	-3.96B	-1.42B

Analog Devices Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 229.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADI, the sentiment is Positive. The current price of 229.47 is above the 20-day moving average (MA) of 221.58, above the 50-day MA of 217.03, and above the 200-day MA of 221.31, indicating a bullish trend. The MACD of 4.37 indicates Negative momentum. The RSI at 56.82 is Neutral, neither overbought nor oversold. The STOCH value of 20.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ADI.

Analog Devices Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADI	74 Outperform	$112.18B	72.13	4.43%	1.63%	-19.28%	-44.00%
STM	71 Outperform	$20.75B	14.41	9.12%	1.17%	-23.24%	-62.93%
NXPI	70 Outperform	$53.55B	21.47	28.16%	1.92%	-4.99%	-9.18%
TXN	70 Outperform	$177.37B	37.50	28.25%	2.73%	-10.72%	-26.60%
MCHP	68 Neutral	$31.27B	102.52	4.71%	3.12%	-44.31%	-86.74%
ON	67 Neutral	$18.75B	12.80	18.97%	―	-14.19%	-27.42%
Sector *	59 Neutral	$22.39B	11.53	-18.05%	2.31%	5.00%	-25.89%

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.