Analog Devices logged a -0.5% change during today's morning session, and is now trading at a price of $176.79 per share.
Analog Devices shares moved 15.1% over the last 52 weeks, with a high of $198.25 and a low of $133.48. During this time, the stock outperformed the S&P 500 index by 15.0%. As of January 2022, the company's 50-day average price is $187.0. 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 large-cap Technology company has 24,450 full time employees and is based in Wilmington, MA. Analog Devices has returned a 1.8% dividend yield over the last 12 months.
Snapshot of the Company's Consistent Operating Margins:
| 2019-10-31 | 2020-10-31 | 2021-10-31 | 2022-10-31 | |
|---|---|---|---|---|
| Revenue (MM) | $5,991 | $5,603 | $7,318 | $12,014 |
| Revenue Growth | n/a | -6.48% | 30.61% | 64.16% |
| Gross Margins | 67.0% | 65.9% | 61.8% | 62.7% |
| Gross Margins Growth | n/a | -1.64% | -6.22% | 1.46% |
| Operating Margins | 30.2% | 27.7% | 24.3% | 29.6% |
| Operating Margins Growth | n/a | -8.28% | -12.27% | 21.81% |
| Net Margins | 22.75% | 21.79% | 19.0% | 22.88% |
| Net Margins Growth | n/a | -4.22% | -12.8% | 20.42% |
| Earnings Per Share | $3.65 | $3.28 | $3.46 | $6.59 |
| EPS Growth | n/a | -10.14% | 5.49% | 90.46% |
| Diluted Shares (MM) | 373 | 372 | 401 | 506 |
| Free Cash Flow (MM) | $1,978 | $1,843 | $2,391 | $3,776 |
| FCF Growth | n/a | -6.82% | 29.77% | 57.9% |
| Capital Expenditures (MM) | -$275 | -$166 | -$344 | -$699 |
| Net Debt / EBITDA | 1.93 | nan | 1.85 | 0.92 |
Analog Devices Is Reasonably Valued:
Compared to the Technology sector's average of 27.16, Analog Devices has a trailing twelve month P/E ratio of 26.8 and, according to its EPS guidance of 10.94, an expected P/E ratio of 16.2. Analog Devices's PEG ratio is 1.16 based on its 24.6% compound average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 10.5%, because the growth rate implied by Analog Devices's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 2.7, which suggests that the company's shares are actually overvalued.
However, Analog Devices is likely undervalued in terms of its equity because its P/B ratio is 2.4 compared to its sector average of 6.23. The company's shares are currently trading 112.7% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 4.25 * 72.218) = $83.1
Analog Devices Is the Subject of Mixed Market Indicators:
25 analysts are following Analog Devices and have set target prices ranging from $175.0 to $251.0 per share. On average, they have given the company a rating of buy. At the current price of $176.79, ADI is trading -19.35% away from its average analyst target price of $219.22 per share, implying an analyst consensus of some upside potential for the stock.
The company has a very low short interest since 1.1% of the company's shares are tied to short positions. Institutions own 89.6% of Analog Devices's shares, while the insider ownership rate stands at 0.37%. The biggest shareholder is the Vanguard Group, Inc. with a 9% stake in the company worth approximately $8,132,457,433.
