The Most Important Facts About Analog Devices

Analog Devices logged a -1.6% change during today's morning session, and is now trading at a price of $171.05 per share.

Analog Devices returned gains of 14.0% last year, with its stock price reaching a high of $200.1 and a low of $133.48. Over the same period, the stock returned a similar cumulative performance to the S&P 500. As of April 2023, the company's 50-day average price was $181.12.

Analog Devices, Inc. designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems that leverage analog, mixed-signal, and digital signal processing technologies. Based in Wilmington, MA, the large-cap Technology company has 24,450 full time employees. Analog Devices has offered a 1.9% dividend yield over the last 12 months.

Wider Gross Margins Than the Industry Average of 54.23%:

2017-11-22 2018-11-27 2019-11-26 2020-11-24 2021-12-03 2022-11-22
Revenue (MM) $5,108 $6,225 $5,991 $5,603 $7,318 $12,014
Gross Margins 60.0% 68.0% 67.0% 66.0% 62.0% 63.0%
Operating Margins 21% 31% 30% 28% 24% 30%
Net Margins 14.0% 24.0% 23.0% 22.0% 19.0% 23.0%
Net Income (MM) $727 $1,507 $1,363 $1,221 $1,390 $2,749
Net Interest Expense (MM) -$221 -$244 -$219 -$189 -$184 -$194
Depreciation & Amort. (MM) -$584 -$799 -$811 -$811 -$1,406 -$2,569
Earnings Per Share $2.08 $4.02 $3.66 $3.28 $3.74 $5.25
EPS Growth n/a 93.27% -8.96% -10.38% 14.02% 40.37%
Diluted Shares (MM) 350 375 373 372 372 523
Free Cash Flow (MM) $1,358 $2,697 $2,528 $2,159 $3,115 $5,217
Capital Expenditures (MM) -$204 -$255 -$275 -$166 -$344 -$699
Net Current Assets (MM) -$8,628 -$7,349 -$7,698 -$6,953 -$8,951 -$8,899
Long Term Debt (MM) $7,551 $6,266 $5,192 $5,145 $6,253 $6,549

Analog Devices has exceptional EPS growth and healthy debt levels. Additionally, the company's financial statements display wider gross margins than its peer group and average operating margins with a positive growth rate. Furthermore, Analog Devices has weak revenue growth and a flat capital expenditure trend, irregular cash flows, and a decent current ratio.

A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:

Analog Devices has a trailing twelve month P/E ratio of 24.6, compared to an average of 27.16 for the Technology sector. Based on its EPS guidance of $8.43, the company has a forward P/E ratio of 21.5. The company doesn't provide forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 23.4%. On this basis, Analog Devices's PEG ratio is 1.05. Using instead the 10.5% weighted average of Analog Devices's earnings CAGR and the broader market's anticipated 5-year EPS growth rate, the company's PEG ratio is 2.35, which suggests that its shares may be overpriced. In contrast, the market is likely undervaluing Analog Devices in terms of its equity because its P/B ratio is 2.37 while the sector average is 6.23. The company's shares are currently trading 88.5% above their Graham number.

There's an Analyst Consensus of Some Upside Potential for Analog Devices:

The 24 analysts following Analog Devices have set target prices ranging from $175.0 to $220.0 per share, for an average of $200.29 with a buy rating. As of April 2023, the company is trading -9.6% away from its average target price, indicating that there is an analyst consensus of some upside potential.

Analog Devices has a very low short interest because 1.3% of the company's shares are sold short. Institutions own 90.7% of the company's shares, and the insider ownership rate stands at 0.39%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $7,818,992,069.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.