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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 at $144.58 in the latest trading session, marking a +1.95% move from the prior day. This move lagged the S&P 500's daily gain of 1.97%. Elsewhere, the Dow gained 1.88%, while the tech-heavy Nasdaq added 0.24%.

Heading into today, shares of the semiconductor maker had lost 7.15% over the past month, outpacing the Computer and Technology sector's loss of 11.71% and the S&P 500's loss of 9.93% in that time.

Investors will be hoping for strength from Analog Devices as it approaches its next earnings release. In that report, analysts expect Analog Devices to post earnings of $2.58 per share. This would mark year-over-year growth of 49.13%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.16 billion, up 35.09% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.42 per share and revenue of $11.93 billion, which would represent changes of +45.82% and +62.97%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Analog Devices. These revisions help to show the ever-changing nature of 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. 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, 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. The Zacks Consensus EPS estimate has moved 0.07% higher within the past month. 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 15.05. This valuation marks a premium compared to its industry's average Forward P/E of 13.8.

Also, we should mention that ADI has a PEG ratio of 1.56. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. ADI's industry had an average PEG ratio of 0.8 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 95, putting it in the top 38% 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.

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