10Y annualized return is
very good
at 11.2% per year
ADI has met or exceeded earnings expectations in
the majority of
recent quarters (8/10)
Strong Gross Profit Margin
Decent Operating Profit Margin
Strong Net Profit Margin
Return on Equity
Strong Liquidity Ratios
Low Debt Levels
Strong Financial Performance
Resilient Market Position
Diverse Product Portfolio
Growth in Key Markets
Innovation and New Product Development
High PE Ratio
Elevated Price to Sales Ratio
Lower Return on Equity
Moderate Interest Coverage
Geopolitical Risks
Overall, ADI shows strong business quality through solid financial performance, market resilience, and a diverse product portfolio. Future prospects appear promising with anticipated growth in key markets and a focus on innovation, despite potential geopolitical and macroeconomic challenges.
Analysis Date: February 19, 2025
Last Updated: March 11, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Analog Devices, Inc. (ADI) is a company that creates small electronic parts called integrated circuits, which help devices work by processing signals. They make products that turn real-world information, like sound or temperature, into digital data that computers can understand, and vice versa. ADI’s technology is used in many areas, including cars, smartphones, and industrial machines, helping them manage power and perform tasks accurately. Founded in 1965 and based in Wilmington, Massachusetts, ADI serves customers all around the world.
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$76.67
Current Market Price: $164.55
IV/P Ratio: 0.47x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-114.99999999999999%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for ADI
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (52.22)
P/B ratio ≤ 1.5 (2.33)
Current ratio ≥ 2.0 (1.93x)
Long-term debt < Net current assets (2.40x)
Margin of safety (-114.99999999999999%)
ADI does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
4.45%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
53.11%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
16.75%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
A net profit margin of 16.75% indicates that ADI retains a significant portion of its revenue as profit after all expenses, reflecting strong profitability.
The return on equity is 4.45%, which is a decent figure, suggesting that the company is generating a reasonable return on shareholders' equity.
While the return on equity is positive, a value of 4.45% is relatively low, which may indicate less efficient use of equity capital compared to peers.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.22x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q1 2025
Current Ratio
Current assets divided by current liabilities
1.93x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q1 2025
The current ratio of 1.93 and quick ratio of 1.43 indicate that ADI has sufficient short-term assets to cover its short-term liabilities, suggesting good liquidity.
A debt to equity ratio of 0.22 indicates that the company has a low level of debt compared to its equity, suggesting a lower risk profile.
While the interest coverage ratio is 6.09, indicating that earnings can cover interest expenses, it is not excessively high, which may warrant monitoring.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
ADI reported first quarter revenue, profitability, and earnings per share above the midpoint of their outlook, indicating robust financial health and operational efficiency.
The company demonstrated resilience throughout the semiconductor cycle, maintaining strong customer relationships and inventory levels, which have largely normalized across channels.
ADI's broad range of products across various sectors, including industrial automation, automotive, healthcare, and aerospace, provides a competitive edge and mitigates risks associated with sector-specific downturns.
ADI anticipates double-digit year-over-year growth in several sectors, including industrial automation and automotive, driven by new technologies and increased demand.
The company is actively investing in innovation, with new products in sectors like AI infrastructure and healthcare, positioning ADI well for future growth.
Ongoing geopolitical issues and uncertainty in macroeconomic conditions may pose risks to ADI's recovery and growth trajectory.