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Analog Devices (ADI) Outpaces Stock Market Gains: What You Should Know

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Analog Devices (ADI - Free Report) closed the most recent trading day at $160.64, moving +1.02% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.18%.

Coming into today, shares of the semiconductor maker had gained 6.08% in the past month. In that same time, the Computer and Technology sector gained 9.78%, while the S&P 500 gained 6.99%.

Investors will be hoping for strength from ADI as it approaches its next earnings release, which is expected to be May 19, 2021. In that report, analysts expect ADI to post earnings of $1.45 per share. This would mark year-over-year growth of 34.26%. 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.

Investors should also note any recent changes to analyst estimates for ADI. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 0.25% higher. ADI currently has a Zacks Rank of #3 (Hold).

Digging into valuation, ADI currently has a Forward P/E ratio of 26.44. Its industry sports an average Forward P/E of 30.13, so we one might conclude that ADI is trading at a discount comparatively.

Meanwhile, ADI's PEG ratio is currently 2.16. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor - Analog and Mixed was holding an average PEG ratio of 1.76 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 84, which puts 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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