Analog Devices (ADI) AI Stock Analysis

• Market Cap: $104.45B
• Dividend Yield: 1.78%
• Average Volume (3M): 4.09M
• Price to Earnings (P/E): 57.3
• Beta (1Y): 1.54
• Revenue Growth: -6.17%
• EPS Growth: -14.16%
• Country: US
• Employees: 24,000
• Sector: Technology
• Sector Strength: 78
• Industry: Semiconductors
• EPS (TTM): 1.85
• Shares Outstanding: 496,248,200
• 10 Day Avg. Volume: 4,754,540
• 30 Day Avg. Volume: 4,091,841
• PEG Ratio: N/A
• Price to Book (P/B): 2.94
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 32.32
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 2.78
• Enterprise Value/Gross Profit: 21.80
• Enterprise Value/Ebitda: 6.25
• 1Y Price Target: $244.71
• Price Target Upside: 16.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 23

• Rating: 76 Outperform
• Price Target: $239.00 ▲( 13.56% Upside)

Analog Devices shows a solid overall performance, with strong financials, technical indicators, and a positive outlook from the latest earnings call. The main strength lies in its profitability and market recovery, particularly in industrial and automotive sectors. However, the high P/E ratio suggests potential overvaluation, which investors should monitor closely.

Positive Factors

Cyclical Recovery

Bookings, backlog and demand trends are improving across all segments and geographies, indicating a cyclical recovery for Analog Devices, Inc.

Earnings Performance

ADI delivered sales and EPS above consensus in the first quarter, beating revenue in all end markets.

Growth Outlook

Management anticipates FY revenue at the higher end of the forecasted range, reflecting confidence in the growth trajectory despite potential trade policy uncertainties.

Negative Factors

Investor Concerns

Despite a healthy beat and raise in 2Q results, shares were down over 4%, partly due to investor concerns around Automotive pull-ins.

Tariff Concerns

Concerns over valuation and tariff issues keep analysts on the sidelines.

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 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 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
9.34B	9.43B	12.31B	12.01B	7.32B	5.60B
	Gross Profit
4.96B	5.38B	7.88B	7.53B	4.53B	3.69B
	EBIT
1.95B	2.03B	3.82B	3.28B	1.69B	1.50B
	EBITDA
4.11B	2.03B	6.15B	5.61B	2.60B	2.32B
	Net Income Common Stockholders
1.56B	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	7.65B	7.01B	6.55B	6.77B	5.15B
	Net Debt
5.22B	5.66B	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
3.18B	3.12B	3.56B	3.78B	2.39B	1.84B
	Operating Cash Flow
3.84B	3.85B	4.82B	4.48B	2.74B	2.01B
	Investing Cash Flow
-1.08B	-1.10B	-1.27B	-657.37M	2.14B	-180.52M
	Financing Cash Flow
-1.71B	-1.71B	-4.06B	-4.29B	-3.96B	-1.42B

Analog Devices Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 210.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADI, the sentiment is Neutral. The current price of 210.47 is above the 20-day moving average (MA) of 210.08, above the 50-day MA of 199.45, and below the 200-day MA of 214.21, indicating a neutral trend. The MACD of 6.77 indicates Positive momentum. The RSI at 51.88 is Neutral, neither overbought nor oversold. The STOCH value of 31.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ADI.

Analog Devices Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AMD	81 Outperform	$178.86B	80.86	3.90%	―	21.71%	99.00%
QCOM	80 Outperform	$159.63B	14.80	42.21%	2.34%	16.15%	32.28%
ADI	76 Outperform	$104.45B	57.30	5.21%	1.78%	-6.17%	-14.16%
NXPI	75 Outperform	$48.54B	20.72	26.02%	2.11%	-7.21%	-15.29%
TXN	75 Outperform	$160.16B	33.40	29.04%	3.05%	-4.48%	-17.82%
MRVL	69 Neutral	$52.43B	―	-6.26%	0.40%	4.71%	5.57%
Sector *	61 Neutral	$11.28B	10.16	-6.88%	2.97%	7.41%	-8.93%

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.