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

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In the latest trading session, Analog Devices (ADI - Free Report) closed at $175.86, marking a -0.78% move from the previous day. This move lagged the S&P 500's daily loss of 0.12%. Meanwhile, the Dow gained 0.09%, and the Nasdaq, a tech-heavy index, added 0.4%.

Heading into today, shares of the semiconductor maker had gained 18.21% over the past month, outpacing the Computer and Technology sector's gain of 10.34% and the S&P 500's gain of 8.25% in that time.

Wall Street will be looking for positivity from Analog Devices as it approaches its next earnings report date. This is expected to be August 17, 2022. In that report, analysts expect Analog Devices to post earnings of $2.43 per share. This would mark year-over-year growth of 41.28%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.06 billion, up 73.85% from the year-ago period.

ADI's full-year Zacks Consensus Estimates are calling for earnings of $9.23 per share and revenue of $11.83 billion. These results would represent year-over-year changes of +42.88% and +61.63%, respectively.

It is also important to note the recent changes to analyst estimates for Analog Devices. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Analog Devices is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Analog Devices has a Forward P/E ratio of 19.19 right now. This valuation marks a premium compared to its industry's average Forward P/E of 16.37.

Investors should also note that ADI has a PEG ratio of 1.57 right now. 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 0.86 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 27, putting it in the top 11% 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.

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