Analog Devices (ADI)
Technology · NASDAQ · US
Fundamentals
Valuation and ratings
Analog Devices trades at $380.53, which is 32% above the $259.11 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.
Our moat model scores it 84 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 58.8 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Analog Devices
Analog Devices, Inc. engages in the design, manufacture, testing, and marketing of integrated circuits (ICs), software, and subsystems products in the United States, rest of North and South America, Europe, Japan, China, and rest of Asia. It provides data converter products, which translate real-world analog signals into digital data, as well as translates digital data into analog signals; power management and reference products for power conversion, driver monitoring, sequencing, and energy management applications in the automotive, communications, industrial, and consumer markets; and power ICs that include performance, integration, and software design simulation tools for accurate power supply designs. The company also offers amplifiers to condition analog signals; and radio frequency and microwave ICs to support cellular infrastructure; and micro-electro-mechanical systems technology solutions, including accelerometers used to sense acceleration, gyroscopes for sense rotation, inertial measurement units to sense multiple degrees of freedom, and broadband switches for radio and instrument systems, as well as isolators. In addition, it provides digital signal processing and system products for numeric calculations. The company serves clients in the industrial, automotive, consumer, instrumentation, aerospace, defense and healthcare, and communications markets through a direct sales force, third-party distributors, and independent sales representatives, as well as online. The company was incorporated in 1965 and is headquartered in Wilmington, Massachusetts.
ADI passes 2 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
5 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- William Von Mueffling, CANTILLON CAPITAL MANAGEMENT LLC$1.22B · 4.0% of book
- Thomas Gayner, MARKEL GROUP INC.$651.07M · 2.9% of book
- First Pacific Advisors, First Pacific Advisors, LP$548.20M · 7.7% of book
- Steve Cohen, Point72 Asset Management, L.P.$360.74M · 0.5% of book
- AKO Capital, AKO CAPITAL LLP$327.53M · 6.4% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Analog Devices (ADI) undervalued?
Against our discounted cash flow estimate of $259.11, ADI at $380.53 is 32% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own ADI?
5 of the institutions we track reported a position in ADI in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is ADI's P/E ratio?
ADI trades at 58.8 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for ADI, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.