Analog Devices (ADI) Falls Wider Than Broader Markets: What You Need to Know

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

Today, shares of the semiconductor maker have gained 0.63% over the past month, falling behind the Computer and Technology sector’s gain of 4.02% and the S&P 500’s gain of 6.23%.

Analog Devices will be looking to show strength as it approaches its next earnings release. On that day, Analog Devices is expected to report earnings of $2.74 per share, which would represent year-over-year growth of 14.17%. Meanwhile, our latest consensus 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 Devices. Recent revisions reflect the latest near-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 moves in closely held stocks. To benefit from this, we have developed the Zacks Rank, a proprietary model that 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 history of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant over the past month. Analog Devices currently has a Zacks Rank of #2 (Buy).

Investors should also note Analog Devices’ current valuation metrics, including its Forward P/E ratio of 17.88. For comparison, its industry’s average Forward P/E is 17.93, which means Analog Devices stock 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 the 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 Semiconductors – Analog and Mixed industry is a part of the Computers & Technology sector. This industry currently has a Zacks Industry Rank of 89, which puts it in the top 36% of all 250+ industries.

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

For more information on all of these metrics and much more, visit Zacks.com.

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