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Analog Devices (ADI) Gains But Lags Market: What You Should Know

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Analog Devices (ADI - Free Report) closed the most recent trading day at $172.66, moving +0.21% from the previous trading session. This move lagged the S&P 500's daily gain of 0.62%. At the same time, the Dow added 0.55%, and the tech-heavy Nasdaq lost 0.03%.

Coming into today, shares of the semiconductor maker had lost 5.38% in the past month. In that same time, the Computer and Technology sector gained 0.29%, while the S&P 500 gained 0.87%.

Analog Devices will be looking to display strength as it nears its next earnings release. In that report, analysts expect Analog Devices to post earnings of $1.78 per share. This would mark year-over-year growth of 23.61%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.61 billion, up 67.24% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.54 per share and revenue of $10.68 billion, which would represent changes of +16.72% and +45.95%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Analog Devices. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 1.88% higher. Analog Devices is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, Analog Devices is holding a Forward P/E ratio of 22.91. Its industry sports an average Forward P/E of 25.78, so we one might conclude that Analog Devices is trading at a discount comparatively.

Meanwhile, ADI's PEG ratio is currently 1.87. 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 industry currently had an average PEG ratio of 1.63 as of yesterday's close.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 17, which puts it in the top 7% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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