NEW YORK - Shares of Analog Devices , Inc. (NASDAQ:ADI) closed Monday with a slight dip, underperforming the broader market indices. The semiconductor company's stock finished at $170.66, marking a 0.96% decline from the previous session, while the S&P 500 saw only a marginal loss of 0.08%. The Dow Jones Industrial Average managed to eke out a gain of 0.16%, and the Nasdaq Composite Index fell by 0.22%.
The recent performance of ADI's stock has shown a modest increase over the past month, rising by 0.73%, but still lagging behind the Computer and Technology sector's gain of 2.9% and the S&P 500's gain of 1.42%. Investors are eyeing the company's upcoming earnings report, scheduled for November 21, with analysts forecasting earnings of $2.02 per share. This would represent a year-over-year decline of 26.01%. Revenue is also expected to drop, with consensus estimates predicting a decrease of 16.46% to $2.71 billion compared to the same period last year.
Despite this anticipated dip in earnings and revenue, analyst revisions reflect a positive outlook for Analog Devices in the short term. These revisions have an established correlation with near-term stock movements but have recently led to a slight decrease of 0.07% in the Zacks Consensus Estimate for the company's earnings per share (EPS).
Analog Devices currently holds a Zacks Rank of #4 (Sell), which is part of a ranking system that includes estimate revisions and has been validated by third-party audits for accuracy. Historically, stocks rated #1 in this system have delivered an average annual return of +25% since 1988.
In terms of valuation metrics, ADI trades at a Forward Price-to-Earnings (P/E) ratio of 20.67, which is above the industry average Forward P/E of 17.84. The company also maintains a Price/Earnings to Growth (PEG) ratio of 2.14, slightly below its industry's average PEG ratio of 2.3. Within the broader context, the Semiconductor - Analog and Mixed industry ranks at 196 according to the Zacks Industry Rank, placing it in the bottom 23% of over 250 industries.
Investors and analysts alike will be closely monitoring Analog Devices' performance as its earnings report approaches, looking for signs that could either confirm or alter the current positive business pattern predictions that influence stock prices in this highly competitive sector.
InvestingPro Insights
Analog Devices (ADI) has demonstrated a robust financial performance in recent years, which is reflected in the InvestingPro data and tips. With a market cap of $85.04 billion and a P/E ratio of 23.1 as of Q3 2023, the company holds a substantial position in the market.
InvestingPro Tips reveal that ADI has consistently increased its earnings per share and has raised its dividend for 20 consecutive years. These are promising indicators for potential investors, suggesting a strong financial baseline and consistent returns. Moreover, the company's management has been aggressively buying back shares, a sign of their confidence in the company's future prospects.
ADI's revenue growth has been slowing down recently, but it's worth noting that it is a prominent player in the Semiconductors & Semiconductor Equipment industry, and its stock generally trades with low price volatility. This could indicate a level of stability in the company's stock price, despite fluctuations in revenue growth.
It's also worth noting that ADI operates with a moderate level of debt, and its liquid assets exceed short-term obligations. This suggests that the company is in a relatively stable financial position, which could be an attractive feature for potential investors.
In summary, the InvestingPro Tips and data provide valuable insights for investors considering a position in ADI. For more detailed tips and metrics, consider exploring the InvestingPro platform, which offers an extensive range of investment insights and data.
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