Analog Devices (ADI) AI Stock Analysis

• Market Cap: $147.02B
• Dividend Yield: 1.43%
• Average Volume (3M): 3.19M
• Price to Earnings (P/E): 65.8
• Beta (1Y): 1.58
• Revenue Growth: 16.89%
• EPS Growth: 39.29%
• Country: US
• Employees: 24,000
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 2.26
• Shares Outstanding: 489,654,080
• 10 Day Avg. Volume: 3,314,337
• 30 Day Avg. Volume: 3,185,050
• 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: 0.82
• Enterprise Value/Revenue: 10.96
• Enterprise Value/Gross Profit: 18.34
• Enterprise Value/Ebitda: 24.02
• 1Y Price Target: $309.22
• Price Target Upside: 2.99% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 24
• EPS Forecast (FY): 9.95
• Revenue Forecast (FY): $13.07B

• Rating: 78 Outperform
• Price Target: $318.00 ▲(5.91% Upside)

Analog Devices scores well due to its strong financial performance and positive earnings call, which highlighted robust revenue growth and shareholder returns. However, the high valuation and technical indicators suggesting overbought conditions temper the overall score. Macroeconomic and geopolitical challenges also pose potential risks.

Positive Factors

Revenue Growth

The significant revenue growth across all end markets indicates strong demand for ADI's products, enhancing its market position and supporting long-term expansion.

Cash Generation

Robust cash generation capabilities provide ADI with the financial flexibility to invest in R&D, pay dividends, and repurchase shares, supporting sustainable growth.

Market Leadership

Leadership in AI and automation positions ADI well in high-growth sectors, ensuring continued relevance and competitive advantage in the semiconductor industry.

Negative Factors

Macroeconomic Challenges

Ongoing macroeconomic and geopolitical uncertainties could impact ADI's operations and demand, posing risks to revenue stability and growth.

Automotive Sector Outlook

Tariffs and policy-related challenges in the automotive sector may hinder growth, affecting ADI's performance in this key market segment.

Wireless Revenue Stagnation

Stagnant wireless revenue suggests potential issues in this segment, which could limit ADI's growth prospects if not addressed.

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

Analog Devices demonstrates strong financial performance with robust profitability and efficient cash flow management. The company maintains a stable balance sheet with low leverage, although there is room for improvement in return on equity. While revenue and cash flow growth have shown positive trends, past fluctuations highlight the need for consistent performance to mitigate potential risks.

Income Statement

Analog Devices has demonstrated strong revenue growth with a 6.09% increase in the latest year, indicating a positive trajectory. The company maintains healthy profitability with a gross profit margin of 61.47% and a net profit margin of 20.58%. The EBIT and EBITDA margins are also robust at 27.49% and 45.63%, respectively, showcasing operational efficiency. However, the revenue growth rate has fluctuated over the years, which could pose a risk if not stabilized.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.25, indicating conservative leverage. The return on equity is moderate at 6.70%, suggesting room for improvement in generating returns for shareholders. The equity ratio is strong, highlighting a stable capital structure. Despite these strengths, the declining trend in stockholders' equity over recent years could be a concern if it continues.

Cash Flow

Cash flow analysis reveals a healthy free cash flow growth rate of 16.32%, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 1.48, reflecting efficient cash conversion. The free cash flow to net income ratio of 0.89 further underscores the company's ability to generate cash relative to its earnings. However, fluctuations in free cash flow growth in previous years suggest potential volatility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	11.02B	9.43B	12.31B	12.01B	7.32B
Gross Profit	6.02B	5.38B	7.88B	7.80B	4.86B
EBITDA	5.03B	4.20B	6.17B	5.60B	2.59B
Net Income	2.27B	1.64B	3.31B	2.75B	1.39B
Balance Sheet
Total Assets	47.99B	48.23B	48.79B	50.30B	52.32B
Cash, Cash Equivalents and Short-Term Investments	3.65B	2.36B	958.06M	1.47B	1.98B
Total Debt	8.66B	7.65B	7.01B	6.60B	6.82B
Total Liabilities	14.18B	13.05B	13.23B	13.84B	14.33B
Stockholders Equity	33.82B	35.18B	35.57B	36.47B	37.99B
Cash Flow
Free Cash Flow	4.28B	3.12B	3.56B	3.78B	2.39B
Operating Cash Flow	4.81B	3.85B	4.82B	4.48B	2.74B
Investing Cash Flow	-1.32B	-1.10B	-1.27B	-657.37M	2.14B
Financing Cash Flow	-2.98B	-1.71B	-4.06B	-4.29B	-3.96B

Analog Devices Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 300.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• 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 300.25 is above the 20-day moving average (MA) of 285.27, above the 50-day MA of 266.66, and above the 200-day MA of 235.69, indicating a bullish trend. The MACD of 9.11 indicates Negative momentum. The RSI at 68.65 is Neutral, neither overbought nor oversold. The STOCH value of 80.97 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	80 Outperform	$170.74B	31.79	23.34%	2.01%	13.66%	-45.40%
TXN	78 Outperform	$174.07B	34.95	29.60%	3.11%	9.90%	1.65%
ADI	78 Outperform	$147.02B	65.78	6.57%	1.43%	16.89%	39.29%
AMAT	77 Outperform	$259.30B	37.76	35.51%	0.69%	4.47%	0.48%
MRVL	76 Outperform	$68.24B	28.17	18.04%	0.28%	44.95%	―
NXPI	70 Neutral	$59.67B	29.12	21.19%	1.79%	-6.81%	-23.16%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%