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Analog Devices (ADI) Hits 52-Week High on Strong Q1 Results

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Share price of Analog Devices, Inc. (ADI - Free Report) rallied to a new 52-week high of $82.57, eventually closing a bit lower at $81.97 on Feb 16. This represents a strong one-year return of 57%, slightly lower than the Zacks Semiconductor - Analog and Mixed industry’s gain of 57.8% over the same time period.

Currently, Analog Devices holds a Zacks Rank #2 (Buy). Notably, the company has a market cap of $25.2 billion.

What’s Driving the Stock?

Analog Devicesis a leading supplier of analog and DSP integrated circuits.The company reported strong first-quarter fiscal 2017 results wherein both earnings and revenues exceeded the Zacks Consensus Estimate. However, management provided a weak guidance for the second-quarter of fiscal 2017.

The better-than-expected results were driven by strength across all the markets - industrial, automotive, consumer and communications, and the company’s increased focus on innovation and operational execution.

At the call, management sounded upbeat on the progress related to the closure of the acquisition of Linear Technology. The company expects the deal to be completed by the end of second quarter fiscal 2017.

It is expected to make Analog Devicesan industry leader across a huge range of products, customer breadth and scale. The deal will also help it to grow significantly in industrial, automotive, and communications infrastructure markets.

While its investments are aimed at strengthening the product line and countering increasing competition, the policy of returning cash through dividends and share buybacks will ensure investor loyalty.

Analog Devices, Inc. Price and Consensus

Estimate Revisions

The Zacks Consensus Estimate for Analog Devicescurrent year has improved to $3.42 from $3.39 over the last seven days. For fiscal 2018, the consensus estimate increased 2.2% to $3.77 per share over the same time frame.

Key Sector Picks

Some stocks worth considering in the broader technology space include Aspen Group, Inc. (ASPU - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Bridgeline Digital, Inc. (BLIN - Free Report) and HealthStream, Inc. (HSTM - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1  Rank stocks here.

Notably, the consensus estimate for Aspen’s current year has narrowed down to a loss of 2 cents from a loss of 6 cents over the last 60 days.

Similarly, the consensus estimate for Bridgeline Digital’s current year has narrowed down to a loss of 9 cents from a loss of 10 cents over the last 60 days.

Last but not the least, the consensus estimate for HealthStream’s current year has remained stable at 21 cents over the last 60 days.

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