Analog Devices, Inc. (ADI) Buy or Sell Stock Guide

Last updated: Jul 12, '19

Are you looking for the analysis of Analog Devices, Inc. (ADI) stock? Are you wondering what the bulls and the bears say about it?

If so, you came to the right place. In this stock guide, we will share with you 6 reasons to buy and 6 reasons to sell ADI stock. You’ll get a perspective on what the bulls and the bears say about it.

The analysis below may be also helpful to you if you have any of the following questions about ADI stock:

  • Is ADI a buy or a sell?
  • Should I sell or hold ADI stock today?
  • Is ADI a good buy / investment?
  • What are ADI analyst opinions, recommendations and ratings?

Let’s start with the bull case. Here are the reasons to buy ADI stock:

1. Analog Devices has tens of thousands of customers and is not reliant on the fortunes of any single chip buyer.

2. In the highly fragmented analog chip space, ADI is one of the few firms with a commanding market share lead in a specific subsegment, as it controls about half the market in data converter chips.

3. ADI is well positioned to profit from the long-term secular trend of increased electronics content in automobiles, such as in-dash infotainment displays and safety sensors.

4. ADI profitability is improving. The YoY profit margin change was 9.78percentage points. See ADI profitability chart.

5. ADI forward dividend yield is 1.93%, higher than the industry (0.54%) and sector (0.23%) forward dividend yields. See ADI forward dividend chart.

6. ADI average analyst rating is Buy. See ADI analyst rating chart.

Now that you understand the bull case, let’s look at the reasons to sell ADI stock (i.e., the bear case):

1. Despite its strong position and diverse exposure, Analog Devices is still vulnerable to the cyclicality of the overall semiconductor industry.

2. ADI’s consumer revenue may be more volatile as the firm gains opportunistic design wins but potentially loses them if gross margins on such sales become less than adequate.

3. ADI has especially strong exposure to the communications infrastructure end market, and spending by telecom makers on advanced networks has been notoriously lumpy over time.

4. ADI stock price ($113.92) is close to the 52-week high ($117.89). Perhaps now is a good time to sell? See ADI price chart.

5. ADI quarterly revenue growth was -2.42%, lower than the industry and sector average revenue growth (5.18% and 5.11%, respectively). See ADI revenue growth chart.

6. ADI average analyst price target ($113.55) is below its current price ($113.92). See ADI price target chart.

Now let's look at the key statistics for ADI:

Metrics ADI
Price $116.00
Average Price Target / Upside $113.55 / -2.11%
Average Analyst Rating Buy
Industry Semiconductors
Sector Technology
Number of Employees 15,800
Market Cap $42.69B
Forward P/E Ratio 20.202
Price/Book Ratio 7.0383
PEG 2.4841
Revenue (TTM) $6.14B
YoY Quarterly Revenue Growth -2.4230517354289454%
Profit Margin 24.755700325732903%

What are your thoughts on ADI?

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