If you invested $1,000 in analog devices ten years ago, that’s what it would be worth now

For most investors, how much a stock’s price changes over time is important, as price performance can both influence your investment portfolio and help you compare investment performance across different sectors and industries.

FOMO, or fear of missing out, also plays a role in investing, especially when it comes to tech giants and popular consumer-facing stocks.

What if you had invested in analog devices (ADI) ten years ago? Maintaining ADI throughout this time may not have been easy, but if it had happened, how much would your investment be worth today?

Detailed business analysis of analog devices

With this in mind, let’s look at the main business drivers of Analog Devices.

Analog Devices, Inc. Headquarters located in Norwood, Massachusetts. The company is an original equipment manufacturer of semiconductor devices, specifically analog, mixed-signal and digital signal processing (DSP) integrated circuits.

The product line consists of amplifiers and comparators; analog-to-digital converters; digital-to-analog converters; video encoders and decoders; embedded processing products and DSPs; MEMS and temperature sensors; RF/IF components and converters; power and thermal management ICs, audio/video converters, amplifiers, codecs, filters and processors.

The company’s offer also includes analog, digital and RF switches and multiplexers; analog microcontrollers; clock and timing products; voltage references; interface products such as isolators, translators and transceivers; wireless products and converters; broadband products including amplifiers, codecs, chipsets, splitters.

Analog Devices has manufacturing facilities in the United States, Ireland and Southeast Asia. The company also uses third-party foundries, primarily Taiwan Semiconductor Manufacturing Company for front-end processing and third-party subcontractors for back-end operations.

Notably, the company generated revenue of $12.3 billion in fiscal year 2023.

The company generates revenues from four organized end markets – Industrial, Consumer, Communications and Automotive.

In the industrial market (53% of fiscal 2023 revenue), Analog Devices serves the needs of the industrial & instrumentation, defense/aerospace, energy management and healthcare sectors.

In the communications market (13%), Analog Devices offers products required for Internet infrastructure, broadband and wireless applications.

For the automotive market (24%), the company offers products used in infotainment, electrification, autonomous, ADAS and safety applications.

Additionally, the company addresses the requirements for feature-rich and high-performance products such as mobile devices and prosumer video/audio equipment in the consumer market (10%).

The company meets the growing demand for its products in the above-mentioned markets through strong sales channels. We would like to remind you that it has direct sales offices, sales representatives and distributors in over 50 countries.

Bottom line

Anyone can invest, but building a successful investment portfolio requires research, patience and a bit of risk. So if you invested in Analog Devices ten years ago, you probably feel pretty good about your investment today.

By our calculations, a $1,000 investment made in June 2014 will be worth $4,207.66, an increase of 320.77% as of June 14, 2024, and this return excludes dividends but does include price increases.

Compare this to the S&P 500 Index’s gain of 180.65% and gold’s return of 73.20% over the same time frame.

In the future, analysts expect further growth for ADI.

Analog Devices reported weak results for its fiscal second quarter, with both profits and revenues declining year over year. This was due to softness in the consumer market. The main problem was the weak demand environment. Weakness in communications and industrial markets due to broad-based inventory corrections was negative. Also, unfavorable macro factors led to weakening dynamics in the automotive market. The ongoing inventory correction is expected to be a negative factor for the company in the near future. However, strength in the EV space thanks to Analog Devices’ robust battery management system solutions remains a tailwind. Further positives are the increasing successes in power design. The solid development of the HEV platform across the cabin electronics ecosystem is positive. Since the beginning of the year, the company’s shares have performed better than the entire industry.

The company’s shares have gained 9.30% over the past four weeks, and fiscal 2024 earnings estimates were 13 higher versus none lower. Consensus estimates also increased.

Want the latest recommendations from Zacks Investment Research? Today you can download the top 7 stocks for the next 30 days. Click to get this free report

Analog Devices, Inc. (ADI): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research