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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 at $173.63 in the latest trading session, marking a +1.9% move from the prior day. This move outpaced the S&P 500's daily gain of 0.92%. Meanwhile, the Dow gained 0.51%, and the Nasdaq, a tech-heavy index, added 0.54%.

Coming into today, shares of the semiconductor maker had lost 4.52% in the past month. In that same time, the Computer and Technology sector lost 5.93%, while the S&P 500 lost 0.85%.

Wall Street will be looking for positivity from Analog Devices as it approaches its next earnings report date. 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.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.54 per share and revenue of $10.68 billion. These totals would mark changes of +16.72% and +45.95%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Analog Devices. Recent revisions tend to reflect the latest near-term business trends. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Analog Devices is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, Analog Devices currently has a Forward P/E ratio of 22.6. This valuation marks a premium compared to its industry's average Forward P/E of 21.65.

We can also see that ADI currently has a PEG ratio of 1.85. 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. Semiconductor - Analog and Mixed stocks are, on average, holding a PEG ratio of 1.45 based on yesterday's closing prices.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 47, putting it in the top 19% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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