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Analog Devices (ADI) Dips More Than Broader Markets: What You Should Know

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Analog Devices (ADI - Free Report) closed the most recent trading day at $158.46, moving -0.44% from the previous trading session. This change lagged the S&P 500's daily loss of 0.41%.

Heading into today, shares of the semiconductor maker had gained 3.97% over the past month, lagging the Computer and Technology sector's gain of 9.72% and the S&P 500's gain of 5.07% in that time.

Investors will be hoping for strength from ADI as it approaches its next earnings release. The company is expected to report EPS of $1.45, up 34.26% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.6 billion, up 21.74% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.01 per share and revenue of $6.49 billion. These totals would mark changes of +22.4% and +15.83%, respectively, from last year.

Any recent changes to analyst estimates for ADI should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.25% higher within the past month. ADI is currently a Zacks Rank #2 (Buy).

Digging into valuation, ADI currently has a Forward P/E ratio of 26.47. This represents a discount compared to its industry's average Forward P/E of 30.1.

Meanwhile, ADI's PEG ratio is currently 2.16. 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 1.38 at yesterday's closing price.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 86, putting it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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