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Analog Devices (ADI)
NASDAQ:ADI

Analog Devices (ADI) AI Stock Analysis

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Analog Devices

(NASDAQ:ADI)

Rating:77Outperform
Price Target:
$248.00
▲(7.99%Upside)
Analog Devices' overall stock score reflects its strong financial performance and positive outlook from the recent earnings call. Technical indicators support a bullish momentum, though the high valuation presents a risk. Earnings growth across key segments, despite some challenges, reinforces the company's resilience.
Positive Factors
Cyclical Recovery
ADI remains in early stages of a potential multi-year cyclical recovery, suggesting a strong future growth trajectory.
Revenue Growth
Revenue grew 22% year-over-year to USD2.64bn, driven by robust automotive and AI-driven sectors.
Supply Chain
Geo-diverse supply chain is an edge, with stable pricing expected despite peers seeing declines.
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.
Growth Confusion
Strange messaging around full-year growth causes some confusion for anticipated targets.
Tariff Concerns
Automotive pull-ins draw attention to the downside effects of tariffs over the next few quarters.

Analog Devices (ADI) vs. SPDR S&P 500 ETF (SPY)

Analog Devices Business Overview & Revenue Model

Company DescriptionAnalog Devices, Inc. (ADI) is a leading global semiconductor company that specializes in the design, manufacturing, and marketing of high-performance analog, mixed-signal, and digital signal processing (DSP) integrated circuits (ICs). These components are critical in converting real-world phenomena into digital signals, enabling a broad range of applications across various industries. ADI's core products include data converters, amplifiers, radio frequency (RF) ICs, power management products, and sensors. The company's solutions are utilized in sectors such as industrial, automotive, communications, healthcare, and consumer electronics.
How the Company Makes MoneyAnalog Devices generates revenue primarily through the sale of its semiconductor products to a diverse customer base across multiple industries. The company's revenue model is based on the development and sale of high-performance analog and mixed-signal ICs, which are sold directly to original equipment manufacturers (OEMs) and through a network of distributors. Key revenue streams include sales from industrial applications, automotive electronics, communications infrastructure, and consumer electronics. ADI also engages in strategic partnerships and collaborations to enhance its product offerings and expand market reach, which further contributes to its revenue. Additionally, the company invests in research and development to maintain its competitive edge and innovate new solutions, ensuring sustained demand for its products.

Analog Devices Key Performance Indicators (KPIs)

Any
Any
Revenue by Segment
Revenue by Segment
Shows how revenue is distributed across different business units, highlighting which segments drive growth and profitability, and indicating strategic focus areas.
Chart InsightsAnalog Devices is experiencing a strong recovery in its industrial and automotive segments, with notable year-over-year growth driven by demand in China and a broader market recovery. The earnings call highlights a 24% growth in the automotive segment and a 17% increase in industrial, despite tariff uncertainties impacting order patterns. The consumer and communications segments also show robust growth, reflecting a cyclical upturn. However, inventory management and tariff-related challenges could pose risks. The company's positive book-to-bill ratios suggest continued strong demand across all sectors.
Data provided by:Main Street Data

Analog Devices Earnings Call Summary

Earnings Call Date:May 22, 2025
(Q2-2025)
|
% Change Since: 3.82%|
Next Earnings Date:Aug 20, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong revenue growth across all segments, driven by demand recovery in industrial and automotive markets. However, concerns about tariff uncertainty and its impact on order patterns, particularly in the automotive segment, were noted. Operating margin improvement was moderate due to increased compensation expenses. Overall, the positive aspects of revenue growth and market recovery were slightly tempered by the challenges posed by tariffs and inventory management.
Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Second quarter revenue of $2.64 billion, up 9% sequentially and 22% year-over-year, exceeding expectations.
Industrial Market Recovery
Industrial represented 44% of revenue, with 8% sequential growth and 17% year-over-year growth, showing recovery across all subsectors and regions.
Automotive Segment Performance
Automotive represented 32% of quarterly revenue, with a record result of 16% sequential growth and 24% year-over-year growth, driven by strong demand in China.
Communications and Consumer Growth
Communications and consumer segments showed strong growth, with 32% and 30% year-over-year increases respectively.
Gross Margin Improvement
Gross margin was 69.4%, up 60 basis points sequentially, driven by higher utilization.
Positive Outlook and Book-to-Bill Ratios
Positive book-to-bill ratios across all sectors and geographies, indicating strong demand and recovery.
Negative Updates
Tariff Uncertainty Impact
Tariff uncertainty is impacting customer decision-making, with potential pull-forward in automotive orders.
Automotive Segment Pull-Forward
The automotive segment's strong performance may have been aided by high single-digit pull-in activity due to tariff announcements.
Operating Margin Pressure
Operating margin at 41.2%, with pressure from variable compensation increases and annual salary hikes.
Inventory Management Challenges
Inventory increased by $50 million due to investments in die bank, with days of inventory at 169.
Company Guidance
During the Analog Devices Second Quarter Fiscal Year 2025 Earnings Conference Call, the company provided several key metrics and forward-looking guidance. Revenue for the second quarter was $2.64 billion, surpassing expectations with a 22% year-over-year increase. Gross margin stood at 69.4%, and operating margin was 41.2%. The company reported an EPS of $1.85, reflecting a 32% year-over-year growth. Looking ahead, for the third quarter, Analog Devices is forecasting revenue of $2.75 billion, plus or minus $100 million, and an expected operating margin of 41.5%. The adjusted EPS is anticipated to be $1.92, plus or minus $0.10. The company noted a strong performance across all end markets, with notable growth in industrial and automotive sectors, while emphasizing a continued cyclical upturn and resilience in its business model.

Analog Devices Financial Statement Overview

Summary
Analog Devices showcases strong financial stability with solid profitability metrics, a robust cash flow position, and a stable balance sheet. Despite a slight deceleration in growth, the company remains well-positioned for sustainable performance in the semiconductor industry.
Income Statement
85
Very Positive
Analog Devices demonstrates strong profitability with a consistent gross profit margin around 56-58% and solid net profit margins averaging 18-19% in recent periods, indicating efficient cost management. The revenue growth rate in the TTM is modest at approximately 4%, showing steady expansion. EBIT and EBITDA margins are robust, reflecting operational efficiency. While growth has slightly decelerated compared to previous years, the company's profitability metrics remain strong and stable.
Balance Sheet
78
Positive
The company's balance sheet shows a solid equity base with a debt-to-equity ratio of approximately 0.21, suggesting controlled leverage. Return on equity is healthy, averaging around 5%, and the equity ratio at 74% indicates a strong financial foundation. Although total assets have slightly decreased, the company maintains a robust equity position. The balance sheet reflects stability but could benefit from higher asset turnover.
Cash Flow
82
Very Positive
Analog Devices exhibits a strong cash flow position with consistent free cash flow generation and a free cash flow to net income ratio exceeding 1, highlighting effective cash conversion. The operating cash flow to net income ratio is strong, underscoring efficient operations. Recent free cash flow growth is modest at 5.5%, indicating sustainable but slower growth. The cash flow metrics portray a healthy liquidity position, supporting ongoing operations and shareholder returns.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
9.82B9.43B12.31B12.01B7.32B5.60B
Gross Profit
5.58B5.38B7.88B7.53B4.53B3.69B
EBIT
2.24B2.03B3.82B3.28B1.69B1.50B
EBITDA
3.86B4.20B6.15B5.61B2.60B2.32B
Net Income Common Stockholders
1.83B1.64B3.31B2.75B1.39B1.22B
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.38B2.36B958.06M1.47B1.98B1.06B
Total Assets
47.34B48.23B48.79B50.30B52.32B21.47B
Total Debt
7.20B7.65B7.01B6.55B6.77B5.15B
Net Debt
4.82B5.66B6.06B5.08B4.79B4.09B
Total Liabilities
12.33B13.05B13.23B13.84B14.33B9.47B
Stockholders Equity
35.01B35.18B35.57B36.47B37.99B12.00B
Cash FlowFree Cash Flow
3.29B3.12B3.56B3.78B2.39B1.84B
Operating Cash Flow
3.85B3.85B4.82B4.48B2.74B2.01B
Investing Cash Flow
-149.79M-1.10B-1.27B-657.37M2.14B-180.52M
Financing Cash Flow
-3.27B-1.71B-4.06B-4.29B-3.96B-1.42B

Analog Devices Technical Analysis

Technical Analysis Sentiment
Positive
Last Price229.65
Price Trends
50DMA
206.35
Positive
100DMA
208.64
Positive
200DMA
213.69
Positive
Market Momentum
MACD
5.86
Negative
RSI
60.66
Neutral
STOCH
63.41
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 229.65 is above the 20-day moving average (MA) of 221.52, above the 50-day MA of 206.35, and above the 200-day MA of 213.69, indicating a bullish trend. The MACD of 5.86 indicates Negative momentum. The RSI at 60.66 is Neutral, neither overbought nor oversold. The STOCH value of 63.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ADI.

Analog Devices Risk Analysis

Analog Devices disclosed 29 risk factors in its most recent earnings report. Analog Devices reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Analog Devices Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
AMAMD
81
Outperform
$205.58B92.943.90%21.71%99.00%
80
Outperform
$169.60B15.7342.21%2.32%16.15%32.28%
ADADI
77
Outperform
$112.87B61.925.21%1.72%-6.17%-14.16%
77
Outperform
$53.77B22.9526.02%1.92%-7.21%-15.29%
TXTXN
74
Outperform
$180.20B37.5829.04%2.74%-4.48%-17.82%
71
Outperform
$60.35B-3.54%0.32%21.60%50.00%
62
Neutral
$11.95B9.93-7.21%4.85%7.32%-8.25%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ADI
Analog Devices
229.65
2.50
1.10%
AMD
Advanced Micro Devices
126.79
-34.44
-21.36%
MRVL
Marvell
74.95
3.30
4.61%
NXPI
NXP Semiconductors
211.45
-55.85
-20.89%
QCOM
Qualcomm
153.63
-54.33
-26.13%
TXN
Texas Instruments
198.35
8.39
4.42%

Analog Devices Corporate Events

Executive/Board Changes
Analog Devices Board Member Laurie Glimcher Retires
Neutral
May 27, 2025

On May 21, 2025, Dr. Laurie Glimcher retired from the Board of Directors of Analog Devices, Inc., a decision that did not stem from any disagreements with the company’s operations or policies. Following her retirement, the Board reduced its size to ten members, potentially impacting the company’s governance structure.

The most recent analyst rating on (ADI) stock is a Buy with a $225.00 price target. To see the full list of analyst forecasts on Analog Devices stock, see the ADI Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.