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Analog Devices (ADI) Gains But Lags Market: What You Should Know

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Analog Devices (ADI - Free Report) closed at $172.66 in the latest trading session, marking a +0.21% move from the prior day. This change lagged the S&P 500's 0.62% gain on the day. At the same time, the Dow added 0.55%, and the tech-heavy Nasdaq lost 0.03%.

Coming into today, shares of the semiconductor maker had lost 5.58% in the past month. In that same time, the Computer and Technology sector lost 1.01%, while the S&P 500 gained 0.39%.

Wall Street will be looking for positivity from Analog Devices as it approaches its next earnings report date. On that day, Analog Devices is projected to report earnings of $1.78 per share, which would represent year-over-year growth of 23.61%. Our most recent consensus estimate is calling for quarterly revenue of $2.61 billion, up 67.24% from the year-ago period.

ADI's full-year Zacks Consensus Estimates are calling for earnings of $7.54 per share and revenue of $10.68 billion. These results would represent year-over-year changes of +16.72% and +45.95%, respectively.

Investors might also notice recent changes to analyst estimates for Analog Devices. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 4.29% higher. Analog Devices is holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, Analog Devices is currently trading at a Forward P/E ratio of 22.86. Its industry sports an average Forward P/E of 25.43, so we one might conclude that Analog Devices is trading at a discount comparatively.

Meanwhile, ADI's PEG ratio is currently 1.87. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Semiconductor - Analog and Mixed was holding an average PEG ratio of 1.62 at yesterday's closing price.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 6, which puts it in the top 3% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ADI in the coming trading sessions, be sure to utilize Zacks.com.


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