Analog Devices (ADI) AI Stock Analysis

• Market Cap: $125.76B
• Dividend Yield: 1.5%
• Average Volume (3M): 3.82M
• Price to Earnings (P/E): 64.7
• Beta (1Y): 1.47
• Revenue Growth: 7.08%
• EPS Growth: 18.39%
• Country: US
• Employees: 24,000
• Sector: Technology
• Sector Strength: 83
• Industry: Semiconductors
• EPS (TTM): 2.06
• Shares Outstanding: 491,955,440
• 10 Day Avg. Volume: 4,455,320
• 30 Day Avg. Volume: 3,820,567
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 11.11
• Enterprise Value/Gross Profit: 18.46
• Enterprise Value/Ebitda: 24.66
• 1Y Price Target: $274.19
• Price Target Upside: 7.32% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 25

• Rating: 78 Outperform
• Price Target: $263.00 ▲(2.94% Upside)

Analog Devices is well-positioned in the semiconductor industry with strong financial performance and positive earnings outlook. While technical indicators suggest caution due to potential overvaluation, the company's robust revenue growth and strategic management provide a solid foundation for future performance.

Positive Factors

Earnings

ADI delivered a strong 3Q, exceeding expectations on both revenue and EPS with double-digit YoY growth in all end markets, underscoring the strength of its diversified portfolio and ability to capitalize on secular growth trends.

Financial Performance

Free cash flow margins are projected to reach mid-40% levels, which are considered best-in-class and support strong capital returns.

Negative Factors

Gross Margin

Gross margins of 69.2% were below consensus at 70%, likely due to a higher mix from non-Industrial segments.

Valuation

The premium valuation of 29x CY26 PE is higher than peers, raising concerns about its sustainability despite its justification.

Analog Devices Business Overview & Revenue Model

Company Description

Analog Devices, Inc. (ADI) is a leading global semiconductor company specializing in analog, mixed-signal, and digital signal processing (DSP) technologies. Founded in 1965 and headquartered in Norwood, Massachusetts, ADI serves a wide range of sectors including industrial automation, automotive, communications, consumer electronics, and healthcare. The company develops high-performance signal processing solutions, precision analog components, and integrated circuits that enable the conversion, conditioning, and processing of real-world signals, making technology smarter and more efficient.

How the Company Makes Money

Analog Devices generates revenue primarily through the sale of its semiconductor products, which include amplifiers, data converters, microcontrollers, and DSPs. The company operates a diversified revenue model that encompasses multiple sectors, with industrial applications contributing significantly to its earnings, followed by automotive and communications sectors. Key revenue streams are driven by direct sales to original equipment manufacturers (OEMs) and distributors, as well as long-term partnerships with major technology firms. ADI also invests in research and development to innovate its product offerings, which enhances its competitive edge and drives sales in emerging markets. Additionally, the company benefits from economies of scale in manufacturing and strategic acquisitions that expand its product portfolio and market reach.

Analog Devices Financial Statement Overview

Summary

Analog Devices demonstrates strong financial health with robust profitability and efficient cash flow management. The company has a low debt-to-equity ratio and a healthy revenue growth rate, although recent trends indicate a need for vigilance in maintaining growth momentum.

Income Statement

Analog Devices shows strong profitability with a consistent increase in gross profit and net profit margins over the years. The TTM data indicates a healthy revenue growth rate of 5.79%, demonstrating resilience in the semiconductor industry. The EBIT and EBITDA margins are robust, reflecting efficient operational management. However, the revenue growth has slowed compared to previous years, which could be a concern if the trend continues.

Balance Sheet

The company's balance sheet is solid with a low debt-to-equity ratio of 0.25 in the TTM, indicating prudent financial leverage. The return on equity has improved to 5.62% in the TTM, showing better utilization of equity. However, the equity ratio has decreased slightly over the years, suggesting a need for careful monitoring of asset management.

Cash Flow

Analog Devices has demonstrated strong cash flow management with a significant free cash flow growth rate of 11.68% in the TTM. The operating cash flow to net income ratio is healthy at 1.40, indicating efficient cash generation relative to earnings. The free cash flow to net income ratio is also robust at 0.88, reflecting good cash conversion. However, fluctuations in free cash flow growth in previous years suggest potential volatility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.39B	9.43B	12.31B	12.01B	7.32B	5.60B
Gross Profit	6.25B	5.38B	7.88B	7.80B	4.86B	3.69B
EBITDA	4.68B	4.20B	6.17B	5.60B	2.59B	2.32B
Net Income	1.96B	1.64B	3.31B	2.75B	1.39B	1.22B
Balance Sheet
Total Assets	48.19B	48.23B	48.79B	50.30B	52.32B	21.47B
Cash, Cash Equivalents and Short-Term Investments	3.47B	2.36B	958.06M	1.47B	1.98B	1.06B
Total Debt	8.69B	8.01B	7.01B	6.60B	6.82B	5.19B
Total Liabilities	14.11B	13.05B	13.23B	13.84B	14.33B	9.47B
Stockholders Equity	34.09B	35.18B	35.57B	36.47B	37.99B	12.00B
Cash Flow
Free Cash Flow	3.68B	3.12B	3.56B	3.78B	2.39B	1.84B
Operating Cash Flow	4.16B	3.85B	4.82B	4.48B	2.74B	2.01B
Investing Cash Flow	-1.21B	-1.10B	-1.27B	-657.37M	2.14B	-180.52M
Financing Cash Flow	-2.74B	-1.71B	-4.06B	-4.29B	-3.96B	-1.42B

Analog Devices Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 255.50
• 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 255.5 is above the 20-day moving average (MA) of 234.52, above the 50-day MA of 235.96, and above the 200-day MA of 216.73, indicating a bullish trend. The MACD of 5.97 indicates Negative momentum. The RSI at 73.05 is Negative, neither overbought nor oversold. The STOCH value of 92.03 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
QCOM	79 Outperform	$171.74B	15.09	44.62%	2.15%	15.82%	34.20%
ADI	78 Outperform	$125.76B	64.74	5.65%	1.50%	7.08%	18.39%
NXPI	76 Outperform	$59.96B	27.97	23.11%	1.71%	-7.53%	-21.88%
TXN	70 Outperform	$187.26B	37.65	29.84%	2.65%	3.62%	-5.27%
AMAT	69 Neutral	$131.06B	19.31	35.64%	1.05%	6.70%	-5.95%
MRVL	65 Neutral	$64.03B	―	-3.54%	0.32%	21.60%	50.00%
Sector *	61 Neutral	$35.62B	7.50	-10.94%	1.87%	8.86%	-10.27%

Analog Devices Corporate Events

Analog Devices Board Member Laurie Glimcher Retires

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.