Analog Devices (ADI) Falling More Than Broader Markets: What You Need to Know

The latest trading session for Analog Devices (ADI) closed at $188.55, marking a move of -0.54% from the previous day. This change lagged the S&P 500’s daily loss of 0.01%. At the same time, the Dow lost 0.23% and the tech-heavy Nasdaq gained 0.97%.

Heading into today, shares of the semiconductor maker have gained 0.63% over the past month, lagging the Computer & Technology sector’s gain of 4.02% and the S&P 500’s gain of 6.23% in that time.

Analog Devices will be looking to show strength as it approaches its next earnings release. On that day, Analog Devices is projected to report earnings of $2.74 per share, which would represent year-over-year growth of 14.17%. Meanwhile, our latest consensus estimate is calling for revenue of $3.2 billion, up 7.6% from the prior-year quarter.

ADI’s full-year Zacks Consensus Estimates are calling for earnings of $10.60 per share and revenue of $12.65 billion. These results would represent year-over-year changes of +10.76% and +5.31%, respectively.

Investors should also note any recent changes to analyst estimates for analog. Recent changes usually reflect the latest short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Based on our research, we believe these estimate revisions are directly related to stock movements across the board. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Zacks Consensus EPS Estimate remained unchanged over the last month. Analog is currently sporting a Zacks Rank #2 (Buy).

Investors should also note Analog Devices’ current valuation metrics, including its Forward P/E ratio of 17.88. For comparison, the industry’s average P/E is 17.93, which means Analog Devices is trading at a discount to the group.

Meanwhile, ADI’s PEG ratio currently stands at 1.46. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account a stock’s expected earnings growth rate. Semiconductor – Analog and mixed stocks have an average PEG ratio of 1.46 based on yesterday’s closing prices.

The semiconductor – analog and mixed industry is part of the computer and technology sector. This industry currently has a Zacks Industry Rank of 89, putting it in the top 36% of all 250+ industries.

The Zacks Industry Rank ranks from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that industries that score in the top 50% outperform the bottom half by a 2 to 1 margin.

Find more information on all of these metrics and much more on Zacks.com.

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