Analog Devices (ADI) AI Stock Analysis

• Market Cap: $173.84B
• Dividend Yield: 1.43%
• Average Volume (3M): 3.99M
• Price to Earnings (P/E): 65.0
• Beta (1Y): 1.56
• Revenue Growth: 16.89%
• EPS Growth: 39.29%
• Country: US
• Employees: 24,000
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 2.46
• Shares Outstanding: 488,204,160
• 10 Day Avg. Volume: 4,207,516
• 30 Day Avg. Volume: 3,991,908
• PEG Ratio: 1.31
• Price to Book (P/B): 3.42
• Price to Sales (P/S): 10.50
• P/FCF Ratio: 27.05
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 15.52
• Enterprise Value/Gross Profit: 24.69
• Enterprise Value/Ebitda: 33.02
• 1Y Price Target: $394.70
• Price Target Upside: 9.40% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 21
• EPS Forecast (FY): 11.24
• Revenue Forecast (FY): $13.84B

• Rating: 76 Outperform
• Price Target: $381.00 ▲(5.60% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

ADI scores well primarily on strong financial quality (robust free cash flow and conservative leverage) and a constructive earnings outlook with improving margins and broad-based demand. The main offsets are a stretched valuation (high P/E) and technical conditions that look overextended, increasing near-term volatility risk.

Positive Factors

Cash generation & capital returns

Sustained, large FCF provides durable financial flexibility: funds R&D, targeted M&A, and shareholder returns. Management’s 100% FCF return target and recent dividend raise signal capital-allocation discipline that supports investor return and buffers the company through semiconductor cycles.

Secular end-market exposure

Growing exposure to ATE and data-center segments diversifies revenue into secularly expanding markets. These higher-growth, specialized applications leverage ADI’s precision analog capabilities, creating multi-year demand drivers that reduce sensitivity to consumer or cyclical end-market declines.

High margins and operating leverage

Elevated gross and operating margins reflect a high-value analog product mix, pricing power, and utilization leverage. Sustained margin expansion boosts cash flow conversion and reinvestment capacity, supporting durable profitability even if revenue growth moderates across the cycle.

Negative Factors

Cyclicality and multi-year volatility

The semiconductor and industrial cycles produce pronounced swings in revenue and margins, complicating forecasting and capital allocation. Periodic downturns can depress returns on capital, force inventory adjustments, and make sustaining investment and payout policies harder during troughs.

Automotive exposure and regional risk

Heavy automotive exposure concentrates downside: tariff-driven order pull-ins, China exposure and book-to-bill under 1 weaken near-term demand. Prolonged softness in vehicle production or China-specific disruptions could materially pressure a quarter-to-quarter revenue and margin profile.

Inventory & one-time pricing effects

Portions of recent revenue and margin gains stem from channel repricing and discrete items, which are not recurring. Coupled with higher days of inventory, this raises risk that margins and revenue growth may weaken if pricing tailwinds fade or channel inventories reverse, pressuring future cash flow.

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 sale of its semiconductor products, which are critical components in electronic devices. The company's revenue model is based on the production and sale of high-performance analog, mixed-signal, and digital signal processing integrated circuits. Key revenue streams include sales to industries such as automotive, where ADI provides solutions for advanced driver-assistance systems (ADAS), and industrial markets, where its products are used in automation and control systems. Additionally, ADI benefits from partnerships with major technology companies and OEMs (original equipment manufacturers) that integrate its components into their products, further expanding its market reach. The company also invests in research and development to innovate new products, which helps maintain its competitive edge and drive future revenue growth.

Analog Devices Financial Statement Overview

Summary

High-quality financial profile supported by strong cash generation (TTM operating cash flow ~$5.1B; TTM free cash flow ~$4.6B, ~39% of revenue) and conservative leverage (TTM debt-to-equity ~0.26). Profitability is solid (TTM gross margin near 60%, net margin ~21%), but results remain cyclical with multi-year revenue/margin volatility and lower TTM ROE versus prior-cycle peaks.

Income Statement

ADI shows strong profitability, with TTM (Trailing-Twelve-Months) gross margin near 60% and net margin around 21%, supporting healthy earnings power. Revenue rebounded in TTM (+6.7%) after a sharp downturn in 2024 (-23%), but the multi-year pattern is volatile for a semiconductor cycle. Margins also remain below the 2023 peak (when profit margins were notably higher), indicating the business has not fully returned to prior high-water profitability.

Balance Sheet

Leverage looks conservative: TTM (Trailing-Twelve-Months) debt-to-equity is ~0.26, and equity is substantial relative to assets, suggesting good balance-sheet resilience. Debt levels have been relatively stable across periods, limiting refinancing risk. The main offset is middling recent returns on equity (mid-single digits in TTM), which are well below the stronger levels seen in 2022–2023, implying less efficient capital productivity in the latest period.

Cash Flow

Cash generation is a clear strength: TTM (Trailing-Twelve-Months) operating cash flow (~$5.1B) and free cash flow (~$4.6B) are robust, with free cash flow growth +6.6% in TTM. Cash conversion is solid, with free cash flow running close to net income (roughly 89% in TTM), supporting financial flexibility. The key weakness is that free cash flow growth has been inconsistent year-to-year (notably negative in 2023–2024), reflecting cyclical demand and investment timing.

Breakdown	TTM	Oct 2025	Oct 2024	Oct 2023	Oct 2022	Oct 2021
Income Statement
Total Revenue	11.76B	11.02B	9.43B	12.31B	12.01B	7.32B
Gross Profit	7.39B	6.77B	5.38B	7.88B	7.80B	4.86B
EBITDA	5.52B	5.03B	4.20B	6.17B	5.60B	2.59B
Net Income	2.71B	2.27B	1.64B	3.31B	2.75B	1.39B
Balance Sheet
Total Assets	47.99B	47.99B	48.23B	48.79B	50.30B	52.32B
Cash, Cash Equivalents and Short-Term Investments	4.05B	3.65B	2.36B	958.06M	1.47B	1.98B
Total Debt	8.68B	8.66B	7.65B	7.01B	6.60B	6.82B
Total Liabilities	14.20B	14.18B	13.05B	13.23B	13.84B	14.33B
Stockholders Equity	33.79B	33.82B	35.18B	35.57B	36.47B	37.99B
Cash Flow
Free Cash Flow	4.56B	4.28B	3.12B	3.56B	3.78B	2.39B
Operating Cash Flow	5.05B	4.81B	3.85B	4.82B	4.48B	2.74B
Investing Cash Flow	-1.23B	-1.32B	-1.10B	-1.27B	-657.37M	2.14B
Financing Cash Flow	-3.26B	-2.98B	-1.71B	-4.06B	-4.29B	-3.96B

Analog Devices Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 360.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 360.8 is above the 20-day moving average (MA) of 332.41, above the 50-day MA of 305.71, and above the 200-day MA of 254.11, indicating a bullish trend. The MACD of 15.21 indicates Negative momentum. The RSI at 79.27 is Negative, neither overbought nor oversold. The STOCH value of 89.13 is Negative, 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	76 Outperform	$173.84B	65.05	7.86%	1.43%	16.89%	39.29%
AMAT	76 Outperform	$299.93B	38.71	38.86%	0.69%	4.47%	0.48%
MRVL	76 Outperform	$68.47B	27.45	18.04%	0.28%	44.95%	―
TXN	71 Outperform	$193.63B	40.36	29.98%	3.11%	9.90%	1.65%
NXPI	67 Neutral	$59.29B	29.34	21.01%	1.79%	-6.81%	-23.16%
QCOM	64 Neutral	$154.48B	29.91	21.48%	2.01%	13.66%	-45.40%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Analog Devices Corporate Events

Analog Devices Posts Strong Q1 Results, Hikes Dividend

Analog Devices reported strong fiscal first-quarter 2026 results on February 18, 2026, with revenue rising 30% year-on-year to $3.16 billion, led by industrial and communications demand, and record orders in its data center segment. The company significantly improved profitability, lifting gross margin to 64.7%, more than doubling operating income, boosting adjusted EPS by 51%, generating robust free cash flow and returning $1.0 billion to shareholders.

On February 17, 2026, Analog Devices’ board raised the quarterly dividend by 11% to $1.10 per share, effective for shareholders of record on March 3 and payable March 17, marking the 22nd consecutive annual increase. The higher payout, alongside strong cash generation and a revenue outlook pointing to a new high watermark for the second quarter, underscores management’s confidence in ADI’s execution, balance-sheet strength and positioning across key secular growth markets.

The most recent analyst rating on (ADI) stock is a Buy with a $383.00 price target. To see the full list of analyst forecasts on Analog Devices stock, see the ADI Stock Forecast page.

Analog Devices Adds AI Veteran to Board of Directors

On January 20, 2026, Analog Devices director Susie Wee notified the board that she will retire and not stand for re-election at the company’s March 11, 2026 annual shareholders’ meeting, though she will continue to serve on the board and its Nominating and Corporate Governance Committee until that date, with the company emphasizing that her decision did not stem from any disagreement over operations, policies or practices. Effective the same day, the board expanded to 11 members and appointed Panasonic executive officer and veteran Silicon Valley technologist Yoky Matsuoka as an independent director and member of the Corporate Development Committee, with a standard mix of cash retainers and equity compensation; her extensive background in AI, robotics, healthcare technology and integrating hardware, software and AI is expected to strengthen Analog Devices’ strategic direction as it scales solutions across the physical and digital domains.

The most recent analyst rating on (ADI) stock is a Buy with a $360.00 price target. To see the full list of analyst forecasts on Analog Devices stock, see the ADI Stock Forecast page.