Analog Devices, Inc.
ADI
$0.00
-0.70%
Analog Devices, Inc. is a leading analog, mixed-signal, and digital-signal processing chipmaker in the semiconductor industry. It is a dominant player with a significant market share lead in converter chips and serves a diverse customer base across industrial, automotive, and communications markets.…
ADI
Analog Devices, Inc.
$0.00
Related headlines
Investment Opinion: Should I buy ADI Today?
Based on a synthesis of strong fundamentals, positive analyst sentiment, and a clear growth trajectory, the objective assessment leans towards a 'Buy' rating. The company's dominant market position, robust financial health with $4.56B in TTM free cash flow, and 30.4% YoY revenue growth are powerful drivers. However, this recommendation is tempered by the acknowledgment of its premium valuation (Forward P/E 24.42, PEG 1.31), making it more suitable for growth-oriented investors with a tolerance for volatility rather than value seekers.
Sign up to view all
ADI 12-Month Price Forecast
The fundamental case for ADI is strong, but the high valuation introduces significant risk. The bullish stance is based on the company's quality and growth, but confidence is medium due to the stock's sensitivity to meeting elevated earnings expectations and broader market conditions.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Analog Devices, Inc.'s 12-month outlook, with a consensus price target around $0.00 and implied upside of — versus the current price.
Average Target
$0.00
15 analysts
Implied Upside
—
vs. current price
Analyst Count
15
covering this stock
Price Range
$0 - $0
Analyst target range
Wall Street analyst sentiment appears broadly positive, as evidenced by recent institutional ratings from ten major firms including UBS, Goldman Sachs, and JP Morgan, all maintaining Buy, Overweight, or Outperform ratings. However, specific consensus target price data and ratings distribution percentages are not provided in the inputs. The provided analyst data focuses on future estimates, with an average EPS estimate of $14.72 and average revenue estimate of $16.71 billion, but does not include a consensus price target.
Bulls vs Bears: ADI Investment Factors
Analog Devices presents a compelling mix of strong fundamental growth, financial strength, and market leadership, countered by a premium valuation and recent stock price volatility. The company's performance in key secular growth markets like industrial and automotive is a significant tailwind. However, investors must weigh these strengths against the stock's high valuation multiples and sensitivity to broader economic cycles.
Bullish
- Strong Revenue and Earnings Growth: Q1 2026 revenue grew 30.4% YoY, with robust net income margins of 26.3%.
- Solid Financial Health and Cash Flow: Low debt-to-equity (0.26), strong free cash flow ($4.56B TTM), and high current ratio (2.19).
- Dominant Market Position: Leading market share in converter chips, serving diverse industrial and automotive markets.
- Positive Analyst Sentiment: Multiple major firms maintain Buy/Overweight ratings, with bullish news citing $400 target.
Bearish
- Elevated Valuation Multiples: Trailing P/E of 51.05 and Price/Sales of 10.50 are high, indicating premium pricing.
- Recent Price Correction and Volatility: Stock down 10.6% over past month, near 52-week high, suggesting potential overbought conditions.
- Moderating Profitability Returns: ROE of 6.7% and ROA of 4.5% are healthy but have declined from prior higher levels.
- Cyclical Industry Exposure: Semiconductor demand is cyclical; economic slowdown could impact industrial/auto end markets.
ADI Technical Analysis
The stock has demonstrated a strong overall uptrend over the past six months, rising from around $241 in early October 2025 to a closing price of $318.14 on March 31, 2026, representing a 31.6% gain. This bullish momentum is further evidenced by a significant 17.3% increase over the last three months, despite a recent pullback. The short-term performance shows volatility, with the stock gaining 17.3% over three months but declining 10.6% over the past month, indicating a recent correction phase. The current price of $318.14 sits near the upper end of its 52-week range of $158.65 to $363.2, approximately 12.4% below the 52-week high, suggesting the stock is consolidating after a strong rally.
Beta
1.05
1.05x market volatility
Max Drawdown
-28.4%
Largest decline past year
52-Week Range
$159-$363
Price range past year
Annual Return
+59.5%
Cumulative gain past year
| Period | ADI Return | S&P 500 |
|---|---|---|
| 1m | -6.1% | -4.3% |
| 3m | +16.3% | -4.0% |
| 6m | +31.6% | -2.0% |
| 1y | +59.5% | +22.2% |
| ytd | +16.3% | -3.8% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
ADI Fundamental Analysis
Revenue and profitability have shown robust growth, with Q1 2026 revenue of $3.16 billion representing a 30.4% year-over-year increase. The company maintains strong margins, with a Q1 2026 gross margin of 64.7% and a net income margin of 26.3%, indicating efficient operations and pricing power. Financial health is solid, supported by a low debt-to-equity ratio of 0.26 and robust free cash flow generation, with TTM free cash flow reported at $4.56 billion. The current ratio of 2.19 indicates strong short-term liquidity. Operational efficiency metrics are healthy, with a return on equity (ROE) of 6.7% and a return on assets (ROA) of 4.5% as of the latest data. The company's asset base is effectively generating profits, though these returns have moderated from higher levels seen in prior years.
Quarterly Revenue
$3.2B
2026-01
Revenue YoY Growth
+0.30%
YoY Comparison
Gross Margin
+0.64%
Latest Quarter
Free Cash Flow
$4.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is ADI Overvalued?
Given the company's positive net income, the primary valuation metric is the P/E ratio. The trailing P/E ratio is elevated at 51.05, while the forward P/E is more moderate at 24.42, suggesting expectations for significant earnings growth. The PEG ratio of 1.31 indicates the stock may be fairly valued relative to its expected earnings growth rate. Peer comparison data is not available in the provided inputs, so a direct industry average comparison cannot be made. Other valuation metrics include a Price/Sales ratio of 10.50 and an EV/EBITDA of 24.24, which provide additional context for the stock's pricing relative to its sales and operating earnings.
PE
51.1x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 20x~277x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
24.2x
Enterprise Value Multiple
Investment Risk Disclosure
The primary risk for ADI is its elevated valuation, with a trailing P/E of 51.05 and Price/Sales of 10.50. These multiples price in significant future growth, leaving the stock vulnerable to multiple compression if growth expectations are not met or if sector sentiment sours. The company's high exposure to cyclical end markets, particularly industrial and automotive (over half of sales), introduces macroeconomic risk; a downturn in these sectors could pressure revenue and margins.
Operational risks include the potential for increased competition in its core analog and mixed-signal markets, which could erode its strong margins. While the balance sheet is robust with low debt, the high dividend payout ratio of nearly 85% could limit financial flexibility for strategic investments or share buybacks during a downturn. The stock's technical picture shows it is consolidating after a strong rally and a recent 10.6% pullback, indicating investor sensitivity to valuation and near-term performance.
FAQ
Key risks include valuation compression if growth slows, given the high trailing P/E of 51. Economic cyclicality poses a threat, as over half of sales are to industrial and automotive sectors. Operational risks include maintaining high gross margins (64.7%) amid competition. The stock's recent 10.6% monthly drop also highlights its volatility and sensitivity to market sentiment.
The 12-month outlook presents a base case target range of $320-$360, assuming the company meets analyst EPS estimates of ~$14.72 and maintains its current valuation multiple. A bull case to $400 is possible if it exceeds high-end EPS estimates ($18.35) and growth accelerates. A bear case could see a pullback to the $260-$300 range if macroeconomic or execution risks materialize.
ADI appears fairly valued to slightly overvalued based on traditional metrics. Its trailing P/E of 51 is very high, but the more relevant forward P/E of 24.4 reflects expected earnings growth. The PEG ratio of 1.31 suggests the stock is priced roughly in line with its growth rate. The high Price/Sales ratio of 10.5 indicates the market is paying a premium for its revenue quality and market position.
ADI is a good buy for growth-oriented investors, given its 30.4% YoY revenue growth, strong $4.56B free cash flow, and leadership in analog semiconductors. However, its premium valuation (Forward P/E 24.4, PEG 1.31) means it carries higher risk and may be less suitable for value-focused investors. The recent 11% dividend hike and positive analyst sentiment add to its appeal.
ADI is more suitable for long-term investment. Its strength lies in secular growth trends in automotive and industrial automation, which play out over years. The stock's high valuation and recent volatility make it a challenging short-term trade. Long-term investors can better weather cyclical downturns and benefit from the company's durable competitive advantages and dividend growth.