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Analog Devices, Inc. transforms everyday experiences by enabling the seamless interaction between the analog world and digital technology through its cutting-edge integrated circuits and signal processing solutions. As a dominant force in the semiconductor industry, ADI’s portfolio spans data converters, power management, and sensor technologies that power automotive, industrial, and communication systems worldwide. Renowned for innovation and quality, the company’s future hinges on sustaining growth amid evolving market demands and technological shifts. Does ADI’s robust foundation still support its premium market valuation?
Table of contents
Business Model & Company Overview
Analog Devices, Inc., founded in 1965 and headquartered in Wilmington, Massachusetts, stands as a leader in the semiconductor industry. The company builds a cohesive ecosystem of integrated circuits, software, and subsystems that convert, condition, and process analog and digital signals. Its portfolio spans data converters, power management ICs, amplifiers, RF and microwave components, and MEMS technology, serving diverse sectors from automotive to aerospace.
The company’s revenue engine balances hardware innovation with software and system-level solutions, generating consistent value across global markets including the Americas, Europe, and Asia. Its direct sales force and extensive distributor network support a broad client base. Analog Devices’ strong technological foundation and diversified product suite create a formidable economic moat, positioning it to shape the future of signal processing technologies.
Financial Performance & Fundamental Metrics
I will analyze Analog Devices, Inc.’s income statement, key financial ratios, and dividend payout policy to provide a clear view of its fundamental health.
Income Statement
The following table presents Analog Devices, Inc.’s key income statement figures over the last five fiscal years, illustrating revenue, expenses, and profitability metrics in USD.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Revenue | 7.3B | 12.0B | 12.3B | 9.4B | 11.0B |
| Cost of Revenue | 2.5B | 4.2B | 4.4B | 4.0B | 5.0B |
| Operating Expenses | 3.2B | 4.5B | 4.1B | 3.3B | 3.0B |
| Gross Profit | 4.9B | 7.8B | 7.9B | 5.4B | 6.0B |
| EBITDA | 2.6B | 5.6B | 6.2B | 4.2B | 5.0B |
| EBIT | 1.5B | 3.3B | 3.9B | 2.1B | 3.0B |
| Interest Expense | 185M | 200M | 265M | 322M | 318M |
| Net Income | 1.4B | 2.7B | 3.3B | 1.6B | 2.3B |
| EPS | 3.50 | 5.29 | 6.60 | 3.30 | 4.59 |
| Filing Date | 2021-12-03 | 2022-11-22 | 2023-11-21 | 2024-11-26 | 2025-11-25 |
Income Statement Evolution
From 2021 to 2025, Analog Devices, Inc. demonstrated a steady revenue increase of 50.58%, reaching $11B in 2025. Net income grew even more robustly by 63.07% over the same period, climbing to $2.27B. Margins showed improvement, with the gross margin stabilizing at 54.66% and the net margin rising by 8.3%, reflecting enhanced profitability and operational efficiency.
Is the Income Statement Favorable?
The 2025 income statement reveals strong fundamentals with revenues up 16.89% year-on-year and net income increasing 18.61%, supported by favorable gross and EBIT margins of 54.66% and 27.49%. Operating expenses rose in line with revenue growth, maintaining margin stability. Interest expenses remained low at 2.88% of revenue, contributing to a favorable net margin of 20.58%. Overall, the financial metrics present a consistently favorable income statement profile.
Financial Ratios
The table below presents key financial ratios for Analog Devices, Inc. (ADI) over the fiscal years 2021 to 2025 to provide a snapshot of the company’s financial performance and position:
| Ratios | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Net Margin | 19.0% | 22.9% | 26.9% | 17.3% | 20.6% |
| ROE | 3.7% | 7.5% | 9.3% | 4.6% | 6.7% |
| ROIC | 3.4% | 6.1% | 7.5% | 4.0% | 5.5% |
| P/E | 49.6 | 27.4 | 24.3 | 68.4 | 51.1 |
| P/B | 1.81 | 2.06 | 2.27 | 3.18 | 3.42 |
| Current Ratio | 1.94 | 2.02 | 1.37 | 1.84 | 2.19 |
| Quick Ratio | 1.51 | 1.45 | 0.86 | 1.35 | 1.68 |
| D/E | 0.18 | 0.18 | 0.20 | 0.22 | 0.26 |
| Debt-to-Assets | 13.0% | 13.1% | 14.4% | 15.9% | 18.1% |
| Interest Coverage | 9.16 | 16.4 | 14.4 | 6.31 | 9.45 |
| Asset Turnover | 0.14 | 0.24 | 0.25 | 0.20 | 0.23 |
| Fixed Asset Turnover | 3.70 | 5.00 | 3.82 | 2.76 | 3.32 |
| Dividend Yield | 1.61% | 2.05% | 2.08% | 1.60% | 1.66% |
Evolution of Financial Ratios
From 2021 to 2025, Analog Devices, Inc. saw a fluctuating Return on Equity (ROE), peaking in 2023 before declining to 6.7% in 2025. The Current Ratio improved steadily from 1.94 in 2021 to 2.19 in 2025, indicating enhanced liquidity. The Debt-to-Equity Ratio increased moderately but remained low at 0.26 in 2025, reflecting stable leverage. Profitability showed variation with net margins decreasing overall but remaining positive.
Are the Financial Ratios Favorable?
In 2025, profitability metrics like a net margin of 20.58% were favorable, yet ROE at 6.7% and valuation ratios such as a P/E of 51.05 and P/B of 3.42 were unfavorable. Liquidity ratios, including a current ratio of 2.19 and quick ratio of 1.68, were favorable, as was the low debt-to-equity ratio of 0.26 and interest coverage at 9.54. Asset turnover was unfavorable at 0.23, while fixed asset turnover was strong at 3.32. Overall, the financial ratios are slightly favorable, with half the indicators positive and some concerns on efficiency and valuation present.
Shareholder Return Policy
Analog Devices, Inc. maintains a dividend policy with a payout ratio near 85%, yielding around 1.66% annually. Dividend per share has steadily increased from $2.79 in 2021 to $3.89 in 2025. The dividend payments are well covered by free cash flow, supported by prudent capital expenditure.
The company also engages in share buybacks, complementing its dividend distribution strategy. This combined approach balances shareholder returns with sustainable financial health, indicating a measured policy that supports long-term value creation without excessive risk from distributions or repurchases.
Score analysis
The following radar chart presents an overview of Analog Devices, Inc.’s key financial scores for investor evaluation:
The company shows moderate scores in discounted cash flow, return on equity, and return on assets, indicating stable operations. Debt-to-equity and price-to-book ratios are also moderate, while the price-to-earnings score is very unfavorable, reflecting valuation challenges.
Analysis of the company’s bankruptcy risk
Analog Devices, Inc. is positioned well within the safe zone according to its Altman Z-Score, indicating a low risk of bankruptcy:
Is the company in good financial health?
The Piotroski Score diagram highlights the company’s financial strength based on key accounting metrics:
With a score of 7, Analog Devices, Inc. is classified as financially strong, reflecting solid profitability, liquidity, and operational efficiency.
Competitive Landscape & Sector Positioning
This sector analysis will explore Analog Devices, Inc.’s strategic positioning, revenue segments, key products, main competitors, competitive advantages, and SWOT analysis. I will examine whether Analog Devices, Inc. holds a competitive advantage over its peers in the semiconductor industry.
Strategic Positioning
Analog Devices, Inc. maintains a diversified product portfolio across automotive, industrial, communications, and consumer markets, with industrial leading at $4.3B in 2024. Geographically, its revenue is broadly distributed, notably $2.8B in the U.S., $2.1B in China, and similar in Europe, reflecting a balanced global presence.
Revenue by Segment
This pie chart illustrates Analog Devices, Inc.’s revenue distribution by business segment for the fiscal year 2024, highlighting key drivers of the company’s sales.
In 2024, Industrial remained the dominant segment with $4.3B in revenue, followed by Automotive at $2.8B. Communications and Consumer segments contributed $1.1B and $1.2B respectively. Compared to prior years, Industrial revenue saw a noticeable decline from $6.6B in 2023, indicating a slowdown, while Automotive showed a slight decrease. The revenue concentration in Industrial and Automotive segments underscores potential exposure to sector-specific risks.
Key Products & Brands
The following table outlines Analog Devices, Inc.’s key product categories and their main features:
| Product | Description |
|---|---|
| Data Converter Products | Translate real-world analog signals into digital data and vice versa, essential for signal processing. |
| Power Management & Reference | Products for power conversion, driver monitoring, sequencing, and energy management applications. |
| Power ICs | Include performance, integration, and software design simulation tools for power supply designs. |
| High-Performance Amplifiers | Condition analog signals across various applications. |
| Radio Frequency & Microwave ICs | Support cellular infrastructure and communication systems. |
| Microelectromechanical Systems (MEMS) | Solutions including accelerometers, gyroscopes, inertial measurement units, broadband switches, and isolators. |
| Digital Signal Processing & System Products | Offer high-speed numeric calculations for advanced signal processing. |
Analog Devices, Inc. offers a broad range of analog, mixed-signal, and digital signal processing products serving industrial, automotive, communications, consumer, aerospace, and instrumentation markets globally.
Main Competitors
There are 38 competitors in the semiconductors industry, with the table below showing the top 10 leaders by market capitalization:
| Competitor | Market Cap. |
|---|---|
| NVIDIA Corporation | 4.6T |
| Broadcom Inc. | 1.6T |
| Taiwan Semiconductor Manufacturing Company Limited | 1.6T |
| ASML Holding N.V. | 415B |
| Advanced Micro Devices, Inc. | 363B |
| Micron Technology, Inc. | 353B |
| Lam Research Corporation | 232B |
| Applied Materials, Inc. | 214B |
| QUALCOMM Incorporated | 185B |
| Intel Corporation | 173B |
Analog Devices, Inc. ranks 13th among 38 competitors, with a market cap about 3.25% of the leader’s (NVIDIA). It is positioned below the average market cap of the top 10 competitors (974.8B) but remains above the median market cap in its sector (30.7B). The company’s market cap is 7.79% lower than the next competitor above it, illustrating a moderate gap in scale.
Comparisons with competitors
Check out how we compare the company to its competitors:
Does ADI have a competitive advantage?
Analog Devices, Inc. currently does not present a strong competitive advantage as its return on invested capital (ROIC) is below its weighted average cost of capital (WACC), indicating value destruction despite a growing ROIC trend. The overall moat status is slightly unfavorable, reflecting challenges in generating excess returns even as profitability improves.
Looking ahead, ADI’s broad product portfolio in analog, mixed-signal, and digital signal processing technologies targets diverse markets such as automotive, industrial, communications, and aerospace, offering opportunities to leverage new technologies and expand geographic reach. Continuous innovation and market diversification remain critical to enhancing its competitive position in the semiconductor industry.
SWOT Analysis
This SWOT analysis highlights the key internal and external factors impacting Analog Devices, Inc. to guide informed investment decisions.
Strengths
- strong revenue growth of 16.9% in 2025
- robust net margin at 20.58%
- diversified global market presence with significant sales in US, China, and Europe
Weaknesses
- relatively high PE ratio at 51.05 indicating premium valuation
- moderate return on equity at 6.7%
- asset turnover ratio low at 0.23 reflecting modest asset efficiency
Opportunities
- expanding demand in automotive and industrial segments
- growth in analog and mixed-signal IC markets
- innovation in power management and sensor technologies
Threats
- intense semiconductor industry competition
- geopolitical risks affecting China and global markets
- supply chain disruptions and component shortages
Overall, Analog Devices demonstrates strong profitability and growth with a broad geographic footprint. However, valuation and efficiency metrics warrant caution. The company should leverage innovation and market expansion while managing competitive and geopolitical risks carefully.
Stock Price Action Analysis
The weekly stock chart for Analog Devices, Inc. (ADI) illustrates price movements and key levels over the past 12 months:
Trend Analysis
Over the past 12 months, ADI’s stock price increased by 55.79%, indicating a bullish trend with acceleration. The price ranged from a low of 164.6 to a high of 305.6, showing strong upward momentum. The standard deviation of 25.19 confirms notable volatility during this period.
Volume Analysis
Trading volume for ADI has been increasing, with total volume exceeding 2B shares over the full period. Buyer volume slightly exceeds seller volume at 50.87%, indicating balanced but buyer-leaning activity. In the recent three months, volume remains neutral with buyers at 50.62%, suggesting steady investor participation without clear directional bias.
Target Prices
The consensus target prices for Analog Devices, Inc. indicate a generally optimistic outlook among analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 375 | 270 | 316 |
Analysts expect the stock to trade between 270 and 375, with a consensus target around 316, reflecting moderate growth potential.
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Analyst & Consumer Opinions
This section examines recent analyst ratings and consumer feedback related to Analog Devices, Inc. (ADI) performance and reputation.
Stock Grades
Here is a summary of recent verified analyst grades for Analog Devices, Inc. (ADI) from recognized financial institutions:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Susquehanna | Maintain | Positive | 2026-01-22 |
| B of A Securities | Maintain | Buy | 2026-01-21 |
| Stifel | Maintain | Buy | 2026-01-16 |
| Oppenheimer | Maintain | Outperform | 2026-01-16 |
| Citigroup | Maintain | Buy | 2026-01-15 |
| Wells Fargo | Upgrade | Overweight | 2026-01-15 |
| Keybanc | Maintain | Overweight | 2026-01-13 |
| Truist Securities | Maintain | Hold | 2025-12-19 |
| UBS | Maintain | Buy | 2025-12-08 |
| Evercore ISI Group | Maintain | Outperform | 2025-11-26 |
The consensus among analysts leans strongly toward a Buy rating, with most firms maintaining positive outlooks and only a few Hold ratings. Notably, Wells Fargo recently upgraded its rating, indicating increased confidence in the stock.
Consumer Opinions
Consumers of Analog Devices, Inc. (ADI) generally express a mix of satisfaction and constructive criticism, reflecting their experiences with the company’s products and services.
| Positive Reviews | Negative Reviews |
|---|---|
| High-quality and reliable semiconductor components | Occasional delays in customer support response |
| Innovative technology that meets industry standards | Pricing perceived as above average |
| Strong performance in signal processing applications | Limited availability of some niche products |
Overall, consumer feedback highlights ADI’s strength in product reliability and innovation, while noting areas for improvement in customer service responsiveness and pricing competitiveness.
Risk Analysis
Below is a table summarizing the key risks associated with investing in Analog Devices, Inc. (ADI), highlighting their categories, likelihood, and potential impact:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Exposure to semiconductor industry cyclicality and global economic fluctuations | Medium | High |
| Valuation Risk | High P/E ratio of 51.05 indicating potential overvaluation | High | Medium |
| Operational Risk | Relatively low ROE of 6.7%, suggesting challenges in generating shareholder returns | Medium | Medium |
| Competitive Risk | Intense competition in analog and mixed-signal IC markets could pressure margins | Medium | High |
| Supply Chain Risk | Dependence on global supply chains for manufacturing components subject to disruption | Medium | High |
| Financial Stability | Despite favorable Altman Z-Score (7.06), moderate Piotroski Score (7) signals some caution | Low | Medium |
The most likely and impactful risks stem from market volatility and the semiconductor industry’s competitive pressures, coupled with valuation concerns given the elevated P/E ratio. While the company maintains financial stability, investors should carefully monitor market conditions and operational efficiency.
Should You Buy Analog Devices, Inc.?
Analog Devices, Inc. appears to be delivering improving profitability with a growing return on invested capital despite a slightly unfavorable moat reflecting value destruction. Supported by a manageable leverage profile and strong financial health indicators, the company suggests a moderate investment rating of B-.
Strength & Efficiency Pillars
Analog Devices, Inc. exhibits robust profitability with a net margin of 20.58% and a solid gross margin of 54.66%, underscoring strong cost management and pricing power. Its Altman Z-Score of 7.06 places the company firmly in the safe zone, indicating excellent financial health and low bankruptcy risk. The Piotroski Score of 7 further confirms strong operational efficiency and financial strength. Although the ROIC of 5.55% falls below the WACC of 8.43%, signaling value erosion, the company shows improving profitability trends, supported by favorable interest coverage at 9.54 and a conservative debt-to-equity ratio of 0.26.
Weaknesses and Drawbacks
Significant valuation concerns arise from a high P/E ratio of 51.05 and a P/B ratio of 3.42, both marked as unfavorable, suggesting the stock trades at a premium that may limit upside potential. The return on equity at 6.7% is notably weak, reflecting limited efficiency in generating shareholder returns. Additionally, asset turnover at 0.23 is flagged unfavorable, implying suboptimal asset utilization. While liquidity ratios like the current ratio (2.19) and quick ratio (1.68) are healthy, the premium valuation metrics and moderate leverage expose the company to downside risks if growth expectations are unmet.
Our Verdict about Analog Devices, Inc.
The long-term fundamental profile of Analog Devices, Inc. is moderately favorable, underscored by strong profitability and financial stability but offset by valuation and efficiency challenges. The bullish overall stock trend with a 55.79% price increase since 2021 suggests positive market sentiment. Recent buyer dominance remains neutral at 50.62%, indicating steady demand without excessive pressure. This profile might appear attractive for investors seeking exposure to a financially sound semiconductor player, though the elevated valuation could warrant caution and a measured entry approach.
Disclaimer: This content is for informational purposes only and does not constitute financial, investment, or other professional advice. Investing in financial markets involves a significant risk of loss, and past performance is not indicative of future results.
Additional Resources
- Analog Devices Appoints Yoky Matsuoka to its Board of Directors – PR Newswire (Jan 23, 2026)
- Vest Financial LLC Buys 3,702 Shares of Analog Devices, Inc. $ADI – MarketBeat (Jan 23, 2026)
- Analog Devices stock hits all-time high at $313.21 – Investing.com (Jan 23, 2026)
- If You Invested $1000 in Analog Devices 10 Years Ago, This Is How Much You’d Have Now – Nasdaq (Jan 23, 2026)
- Analog Devices (ADI) Announces Board Changes: Susie Wee Retires, Yoky Matsuoka Appointed – GuruFocus (Jan 23, 2026)
For more information about Analog Devices, Inc., please visit the official website: analog.com
