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

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In the latest trading session, Analog Devices (ADI - Free Report) closed at $174.99, marking a +0.86% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.18%.

Prior to today's trading, shares of the semiconductor maker had gained 3.66% over the past month. This has lagged the Computer and Technology sector's gain of 5.57% and the S&P 500's gain of 5.68% in that time.

Wall Street will be looking for positivity from ADI as it approaches its next earnings report date. This is expected to be November 23, 2021. In that report, analysts expect ADI to post earnings of $1.69 per share. This would mark year-over-year growth of 17.36%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.3 billion, up 50.98% from the year-ago period.

It is also important to note the recent changes to analyst estimates for ADI. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.05% lower. ADI is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that ADI has a Forward P/E ratio of 27.07 right now. This valuation marks a premium compared to its industry's average Forward P/E of 26.45.

Investors should also note that ADI has a PEG ratio of 2.8 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Semiconductor - Analog and Mixed industry currently had an average PEG ratio of 1.29 as of yesterday's close.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 29, putting it in the top 12% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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