Analog Devices, Inc. (ADI) on Q1 2021 Results - Earnings Call Transcript
Operator: Good morning, and welcome to the Analog Devices First Quarter Fiscal Year 2021 Earnings Conference Call, which is being audio webcast via telephone and over the web. I'd now like to introduce your host for today's call, Mr. Mike Lucarelli, Senior Director of Investor Relations. Sir, the floor is yours. Mike Lucarelli: Thank you, Cheryl, and good morning, everybody. Thanks for joining our first quarter fiscal 2021 conference call. With me on the call today are ADI's CEO, Vincent Roche and ADI's CFO, Prashanth Mahendra-Rajah. For anyone who missed the release, you can find it and relating financial schedules at investor.analog.com. Vince Roche: Thanks very much Mike, and good morning to you all. So I'll start my remarks with a review of our results before providing insights into how we're shaping a more connected, safer and sustainable future. The first quarter we delivered strong results that came in at high end of our outlook. Revenue was $1.56 billion and increased 20% year-over-year. The strength was broad based, the growth across all end markets highlighted by a record quarter for our industrial business. We delivered gross margin of 70% and op margin of nearly 41%. All told, we produced adjusted earnings per share of $1.44. Over the trailing 12 months, we generated $1.9 billion free cash flow equating to 33% free cash flow margin placing us in the top 10% of S&P 500. So overall I'm very pleased with our team's performance this quarter. Now I'd like to discuss how we're advancing our mission of engineering good for the planet, social health and economic prosperity which in turn will create long-term sustainable value for our shareholders. Awareness of the world's environmental degradation and climate change specifically is growing tremendously with a global called action building momentum. Semiconductors, as the bedrock of the modern digital economy have a major role to play in improving our standard of living while protecting our planetary health. At ADI, our technology sit at the intersection of our customers and societies most pressing challenges and we're uniquely positioned to drive positive impact. Prashanth Mahendra-Rajah: Thank you, Vince. Let me add my welcome to our first quarter earnings call. My comments today with the exception of revenue and non-op expenses will be on an adjusted basis which exclude special items outlined in today's press release. ADI delivered strong first quarter with results at the high end of our outlook. Revenue increased 20% nearing an all-time high, operating margin expanded to 40.7% in line with our long-term model and adjusted EPS grew 40%. We saw tremendous breadth this quarter with all market segments growing year-over-year. The first time in over three years. And B2B revenue increased 2% sequentially and 22% year-over-year with double-digit growth across each end market. Industrial represented 55% of revenue during the quarter increased 5% sequentially and 24% year-over-year. This represented a record quarter for industrial with broad based strength across applications, customers and geographies. Specifically demand across our automation instrumentation and energy businesses accelerated this quarter. Communications which represented 18% of revenue during the quarter decreased 10% sequentially but increased 16% year-over-year. Both wireless and wireline revenue grew double-digit despite zero revenue from Huawei this quarter. Automotive which represented 16% of revenue increased 7% sequentially and 19% year-over-year. With the industry aggressively ramping up production we saw double-digit year-over-year across all applications. BMS exhibited the highest growth, a trend we expect to continue given our growing design pipeline. And lastly, consumer which represented 11% of revenue increased 2% sequentially and 5% year-over-year. We saw strong growth in hearables, wearables and home entertainment. This quarter's inflection puts us on track to return to full year growth in 2021. And now for the rest of the P&L, gross margin which is seasonally weaker in the first quarter finished flat sequentially at 78%. We anticipate our first quarter's gross margin will be the trough for the year as we benefit from a strong top line, improving utilization and capturing the majority of the LTC cost savings. OpEx in the quarter was $456 million up sequentially and year-over-year due mainly to variable compensation. Op margins finished at 40.7% above the guided midpoint. Non-op expenses were $27 million and better than our outlook due to an investment gain. Our tax rate for the quarter was approximately 12%. So all told, adjusted EPS came in above the high end of guidance at $1.44. This included a $0.04 benefit from an investment gain that was not in our prior outlook. Mike Lucarelli: Thanks Prashanth. Let's go to the Q&A session. We ask that limit yourself to one question in order to allow for additional participants on the call this morning. If you have a follow-up question please requeue and we'll take your question, if time allows. With that, Cheryl can we have our first question please. Operator: our first question comes from John Pitzer from Credit Suisse. Please go ahead. Your line is open. John Pitzer: Good morning, guys. Appreciate the question and congratulations on the strong results. Prashanth, I just want to talk a little bit about how the model unfolds from here. I mean clearly you talked about already hitting the gross margin trough for the year. But you're guiding EPS sort of flattish on op revenue. I'm just kind of curious how should we be thinking about OpEx from current run rate levels and specifically, is there incremental OpEx needed because of the tight supply situation? What are the puts and takes as we go throughout the balance of the year? Prashanth Mahendra-Rajah: Thank you for the question, John. Way to think about OpEx is that, if you recall in the Proxy, we identified that last year in the first half we had a particularly low bonus payout as reflection of the macroeconomic environment. In the first half of this year you're going to see the opposite effect of that. So on average it's a normal bonus payout. But you do see a significant upswing in a variable comp for which is impacting both the first and the second quarter compares. In addition, we have the merit increase if you remember we put that merit increase in several months later than normal as a result of the pandemic last year. So you're beginning to see that on a full year run rate basis in first quarter and then it will carry in second quarter. So beyond these comp related items OpEx is really at a steady level. We're not requiring any additional investment at the OpEx level to support the demand that we're generating. John Pitzer: Perfect. Thank you, guys. Mike Lucarelli: Thanks. We'll have our next question. Operator: Thank you. Our next question comes from Ambrish Srivastava from BMO Capital Markets. Please go ahead. Your line is open. Ambrish Srivastava: Prashanth and Vince, I just wanted to get back to the current constrained supply condition that the industry is facing. So could you please comment on your lead times and then what are you seeing in the cost increases as you're experiencing and are you able to pass along pricing through the customers and more importantly, does it change your approach? Is there a structural change that you see happening? Prashanth, you talked about CapEx running a little bit higher. Where does that additional CapEx going? Is back end, front end? And I just wanted to get a better sense of how things change from here on the supply chain front for ADI? Thank you. Prashanth Mahendra-Rajah: Okay, so there's a lot packed into that question, Ambrish. Let me take a couple pieces of it. So we're producing and shipping at record levels and second quarter outlook is going to be a record. We have enough capacity to meet to the guide. But significant additional upside versus that guide will depend on what we're able to procure both from an external wafer standpoint as well as the capital that we're in the process of deploying into our internal facilities to support that. What we're doing to help alleviate that situation is we have been consistently building inventory since last summer to deplete what was pulled down during the pandemic shutdowns. We're adding additional supply both internally and I mentioned the capital that we're deploying which is mostly going to the back end and then externally we've gone out and acquired additional wafers from our partners. I think the answer to your question on CapEx is that is mostly for test and then, on the capacity side. Where we can get additional capacity from our partners, we're doing that. But even with this additional capacity it's very likely that the strength of demand is going to outpace supply for some period of time. So I think we will be chasing demand at least for the balance of this year. From a capital deployment standpoint, some of that as we guide as percentage of revenue some of that is dependent on how strong the year continues to rollout. So when I say slightly above 4%. It could come down to 4% or maybe just a hair below if revenue continues to cripple on here. Vince Roche: Yes, just on the lead time question, Ambrish. So we entered our first quarter with what we've recalled normal lead times. But during the quarter and into the early part of this quarter we've seen lead times extend which I think is pretty consistent with the industry at large. So while we see some hot spots. We're really talking about is few weeks of extension in different places. Let me remind you too that, we run this company. We run our manufacturing plants; the operating plants are run to POS rather than POA. So what we're seeing right now is a good balance between POS and POA. But as Prashanth said, we're preparing for quite a bit of upside during this year and we've pretty substantially increased the CapEx in our backend. Mike Lucarelli: Thanks Ambrish. Go to next question, please. Operator: Our next question comes from Stacy Rasgon from Bernstein Research. Please go ahead. Your line is open. Stacy Rasgon: I wanted to ask about comm. So it's down sequentially and year-over-year I guess into Q2. Is that the trough for the year for comm.? And do you think the comms segment overall can grow year-over-year for the full year 2021? Prashanth Mahendra-Rajah: You want to take that, Vince? Okay, I'll take the first part of that, Stacy. So let's break comms into wired and wireless. On the wired, we're looking for continued growth as carriers and data centers are upgrading networks. On the wireless, we said that, that the US deployment of 5G was always going to be a second half event and our view on that has not changed. What we have seen is a bit more of a slowdown in China as they're digesting kind of the 5G that they deployed and the channel counts are a bit lower. So we do think comms troughs in second quarter and then begins to pick up in the second half with the global 5G. In terms of our view on whether we can grow comms on a year-over-year basis. Given the significant headwind we have from Huawei going to zero, that's a tough ask. Vince Roche: Yes, I think as well, I'll remind everybody that the three-year CAGR for comms has been 7% and that's with that's very, very significant headwind in China. I think when you look at ADI in the comms business it's tremendously diverse. Many, many hundreds of customers. 5G is a critical part. Wireline is an increasingly critical part. So very, very hard to predict in a lumpy business. But our expectation is that, when you have CAGR we produce better than mid single-digit growth for that business. Stacy Rasgon: I'm sorry, was that a long-term statement? That didn't sound like that was this year. Vince Roche: Over the next few years I think Stacy. We will produce something better than mid single-digit growth in that business. Mike Lucarelli: Yes, Stacy what Prashanth says we don't think it will grow this year in fiscal 2021 due to, I will say the Huawei headwinds, as they go to zero and lower channel count in China. But then pivoting to Vince, over the long-term we should grow - we've been growing 7%. There's no reason to go - going forward we can't grow at least in line to that. Stacy Rasgon: Didn't you used to talk about double-digit growth in this business? Mike Lucarelli: We did Stacy. I think the world has changed over the past two years quite a bit. Could it grow double-digit? Sure it could. There's no reason it can't. But I think as we look today with the pressures, you're seeing geopolitically those are things we didn't know two years ago. Vince Roche: I think high single digits is a reasonable expectation. The early stages of 5G, I think being able to grow at double digits pretty plausible but we're working off a bigger numerator at this point in time. So I think if we can produce something in the high single digits. We'll be in very, very good shape. Stacy Rasgon: Got it. Thank you, guys. Mike Lucarelli: Thanks Stacy. Cheryl, next question. Operator: Our next question comes from Tore Svanberg from Stifel. Please go ahead. Your line is open. Tore Svanberg: Vince, you talked about second design win for your wireless BMS solution or second OEM using that technology. Could you elaborate a little bit on how quickly this technology is going to penetrate the auto market? Could you potentially get to six, seven OEMs embracing this technology this year and or next? Vince Roche: Well that's certainly our expectation. I think in terms of getting to market. The latter part of this year we'll see the start of production. And I think between now and the end of 2023 say, we should expect four to five OEMs to adopt that technology. With a strong pipeline, but also remember we have a very strong wired portfolio in BMS. So we've got those two tailwinds working for us. But I think overtime it will be kind of hybrid between wired and wireless. But clearly wireless is the bright star at this point in time and our expectation is, that we'll have at least a handful of OEMs using this technology by start of 2024. Tore Svanberg: Very helpful. Thank you. Mike Lucarelli: Thanks Tore. Operator: And our next question comes from Vivek Arya from Bank of America. Please go ahead. Your line is open. Vivek Arya: Vince, I wanted to talk about just fiscal 2021 and the sustainability of growth. So you're starting the year of very strong, right? 20% growth rates in Q1 and the Q2 outlook. How should we think about the second half of other - do you want to talk about the fiscal year or the calendar year? Which markets do you think right now are over heated because of whatever reasons which are kind of only - which are in line with demand and which ones can actually accelerate going into the second half? Just how should we think about how the segment mix changes as you go towards the second half of the year? Thank you. Vince Roche: Thanks for your question. Typically 1Q is the low point for ADI. We had a reasonably strong first Q compared to kind of normal pattern. But I want to stress there's still a tremendous amount of uncertainty out there. And I don't want to get into the business of making strong speculative predictions here. But we can only kind of guide one quarter at a time particularly in this varying market. But if I look at the markets and just kind of peel the story back a little bit for you. So our industrial business which represents about half of the company's revenue was down we had two consecutive down years in 2019 and 2020. But we produced the record quarter in the first. We expect ongoing strength in that business and one thing I'm very, very pleased about is that the most diverse part of our industrial business is automation and I think given the strength of our opportunity pipeline, the new products we've got coming to market. I expect to see a multi-year tailwind in the automation part. I think right now in automotive there's a big push to electric vehicles and I see that as I said in the prepared remarks that is expected to grow by 2030 from kind of 7 million deployed electric vehicles today to over 200 million by 2030. And we talked a lot last quarter about the strength of our cabin electronics business, active noise cancelation, premium audio, our A2B bus deployments and all that through provides good tailwinds for the company going ahead. Comms as we've just narrated weak in the first half of 2021. But really, I think that's about the timing of deployments and my expectation is that, that business would snuck back in the second half of 2021 and continue into 2022. Last but not least, our consumer business has shown our couple of sequential growth quarters and we no longer have the overhang of one big socket and one big customer. So with the diversity of our business. We were addressing more applications, we've a stronger product portfolio than we've had say three years ago. I think we're on a growth track of that business and we're certainly off to a very, very good start. So we believe that 2020 was bottom of that business and certainly the signals are that is the case. Vivek Arya: Thank you. Mike Lucarelli: Thanks Vivek. Operator: Thank you. Our next question comes from Toshiya Hari from Goldman Sachs. Please go ahead. Your line is open. Toshiya Hari: Vince, you guys talked about growing capacity both internally as well as externally with your foundry partners. How should we think about the step up in your capacity, again both internal and external, over the next couple of quarters? The magnitude at which you can grow capacity for the overall business? And secondly, a couple of your peers have talked about signing long-term contracts with customers. Is that something that ADI is thinking about or considering? Thank you. Vince Roche: Well, I think what you've got to remember is that first and foremost we're producing and shipping products at record levels. 2Q will be an all-time record for the company, so we're certainly keeping ahead. Our investments are keeping ahead of these revenue levels, obviously. Like most of our peers in the industry, there are supply constraints in parts of the business, so we're not able to meet all of the demand, particularly in auto, which has been very, very well-publicized. And the constraints continue across the front end in wafer procurement and also the backend. But I want to remind you, too, we produce about half our silicon inside ADI, and the other half we procure with external partners. So I think something else worth noting is that we've been building inventory since last summer in terms of die stock and finished goods, which was heavily depleted during the pandemic shutdown. So, as I said, internally we're ramping up our own manufacturing operations and we've been successful in acquiring additional wafers from our external partners. So I think that's the best I can give you in terms of the atmosphere that we're working within. We're certainly keeping CapEx deployments ahead of where we think the revenue could be this year based on the demand patterns we now see. Prashanth Mahendra-Rajah: Toshi, I would expect that our guide for each of the subsequent quarters is going to be partly influenced by what we're able to supply. So as I said earlier, I think we're going to be chasing demand for the rest of this fiscal year, and we will use our guidance range to inform how we think - what we can build to base on our ability to get capacity third parties as well as increase capacity internally. Toshiya Hari: And then the long-term contracts, is that something that comes up in conversations or not really? Vince Roche: I think it depends. We do have long-term contracts, but we're doing that on a more strategic basis than tactical, let's say. Toshiya Hari: Got it. Thank you so much. Mike Lucarelli: Thanks, Toshiya. Operator: Our next question comes from Craig Hettenbach from Morgan Stanley. Please go ahead. Your line is open. Craig Hettenbach: Any update on just the linear cross selling synergies and efforts? I know a little while back you talked about the pipeline, but just how you're seeing that kind of unfold? And any particular markets for product segments that you're seeing the most traction along those lines? Vince Roche: Yes, so, Craig, there's a couple of ways to look at this. Obviously, the battery side of things is very, very strong. We've more than doubled the size of that since we acquired LT. And overall, when I look at, for example, power, the mixed signal portfolio, as well as the battery management side of things, we have more than $500 million worth of new revenue going into production this year, and that's just the beginning. So in terms of areas where we're winning, we've got notable wins in communications, in wireless as well as and data center and cloud. In Automotive, we're strongly attaching to our infotainment business, the autonomous radar systems. And the strongest surge in terms of growth in industrial for the LT portfolio, the additional cross selling is instrumentation tests and micromodules generally speaking across the board. We're seeing very, very strong demand for those products. So I think all that said, we had expected that we would double the LTC growth from 3% to 4% historically to high single digits in a five-year period. And that's quite similar to how we viewed our opportunity with Hittite at the beginning and what also has materialized. So that's the story in terms of the markets and the expected growth. Craig Hettenbach: Got it. Appreciate the color. Thanks, Vince. Mike Lucarelli: Cheryl, can we have our last question, please? Operator: Thank you. Our next question comes from C. J. Muse from Evercore. Please go ahead. Your line is open. C. J. Muse: I guess, Vince, to follow-up on that last question and to kind of go back to what you talked about a quarter ago. I think you said factory automation turned positive for the first time in quite a while year-on-year yet was still significantly below the Q3, 2018 levels. So I was hoping we could level set where we are today in your industrial bucket. And as you think about where you are relative to prior peak, what kind of acceleration in growth should we be able to see in 2021 and 2022 particularly around factory automation, A&D and instrumentation? Vince Roche: I'd say I mean, just Mike can give you some numerical color. I'll just give you a couple headline here. So what we're seeing, as I said in the prepared remarks, is an acceleration of the market in general, but we're still well below the previous peak. And given the pipeline of opportunities that we've got, the technologies and the products that we've got, I think the long-term trends are going to be very, very strong, accelerated of course by the obvious need for resilience and driven by automation as a result of the pandemic. But, Mike, you might want to add? Mike Lucarelli: Yes, sure. C. J., you're right. If you look at our Industrial business, we did just achieve a record quarter and we're guiding to another record quarter. So I'll clarify that. But what's interesting is if you peel back a bit, we have six application areas within industrial. Only two of them are above previous peaks. So there's a lot more room for upside across all the verticals. But even if you look back at previous peaks, there's still four application areas we still have more room to run before we hit those peaks. Automation being one of those as well. So I think, as Vince said, it's a long-term growth market, automation and industrial, and you're starting to see that business turn late last year into this year. And I think that continues hopefully into 2022. Prashanth Mahendra-Rajah: Maybe just to close on that, C. J., we've been gaining share in industrial, and we've been gaining share over the last couple of years while the market hasn't been as strong. Now you're going to see the compounding effect of a growing market with the benefits of the share that we've picked up. So I think you will see significant outperformance for ADI's industrial business versus our peers over the balance of this year. Vince Roche: I think healthcare as well, C.J., is worth noting that it still remains considerably above pre-COVID levels. We obviously got a boost during the upsurge in COVID-19. And again, I think this has been growing at 10% for the past five or seven years. I think, a multi-year growth market, and we're beginning to see also the acceleration of demand as a result of the pandemic getting healthcare capabilities to anywhere so to speak. So I think - we look across industrial as an area where we've been, I'd say, steering a lot of our R&D over the last decade or so. It's kind of a long burn business, but we're seeing the benefits now in terms of strength of our technology pipe and our customer engagements. C. J. Muse: Thank you. Mike Lucarelli: All right. Thanks, C.J., and thanks, everyone, for joining us this morning. A copy of the transcript will be available on the website. Thanks for joining the call and your continued interest in Analog Devices. Have a good day. Operator: This concludes today's Analog Devices' conference call. You may now disconnect.
Analog Devices Shares Jump 6% on Q1 Beat and Strong Outlook
Analog Devices (NASDAQ:ADI) saw its shares surge over 6% intra-day today after delivering better-than-expected first-quarter earnings and issuing an optimistic outlook for the second quarter.
For Q1, the semiconductor company posted earnings per share of $1.63, surpassing analyst expectations of $1.54. Revenue fell 4% year-over-year to $2.42 billion, but still came in ahead of the $2.36 billion consensus forecast.
Margins also exceeded estimates, with an adjusted gross margin of 68.8%, compared to the 67.8% projection, while its adjusted operating margin reached 40.5%, slightly above the expected 40.2%.
Management highlighted an improving demand cycle and strong execution across key business segments, positioning Analog Devices for a gradual recovery despite macroeconomic and geopolitical challenges.
For Q2 2025, the company forecasts earnings per share of $1.68, plus or minus $0.10, slightly exceeding the $1.66 analyst consensus. Revenue guidance of $2.5 billion, plus or minus $100 million, also landed above the $2.457 billion Wall Street estimate.
Analog Devices, Inc. (NASDAQ: ADI) Reports Strong Q1 Fiscal Year 2025 Earnings
- ADI's earnings per share (EPS) of $1.63 surpassed the estimated $1.54, marking an earnings surprise of 5.84%.
- Revenue for the quarter was approximately $2.42 billion, exceeding estimates and driven by a resurgence in chip demand.
- The company's financial metrics, including a P/E ratio of approximately 68.51 and a low debt-to-equity ratio of 0.22, underscore its market position and investor confidence.
Analog Devices, Inc. (NASDAQ: ADI) is a prominent player in the semiconductor industry, specializing in high-performance analog, mixed-signal, and digital signal processing technology. The company is known for its innovative solutions that cater to various sectors, including consumer electronics, automotive, and industrial applications. ADI competes with other semiconductor giants like Texas Instruments and NXP Semiconductors.
On February 19, 2025, ADI reported its earnings for the first quarter of fiscal year 2025, showcasing a strong performance. The company reported earnings per share (EPS) of $1.63, surpassing the estimated $1.54, marking an earnings surprise of 5.84% as highlighted by Zacks. Despite this achievement, the EPS was slightly lower than the $1.73 reported in the same quarter last year, indicating some challenges in maintaining growth.
ADI's revenue for the quarter was approximately $2.42 billion, exceeding the estimated $2.36 billion by 2.79%. This positive performance was driven by a resurgence in chip demand, particularly within the consumer segment, which saw a 19% increase to $322.9 million. The growing adoption of AI-driven devices, premium smartphones, and smart home products contributed to this surge, as noted by Chief Executive Vincent Roche.
Despite the success in beating estimates, ADI faced year-over-year declines, with revenue slightly down from the $2.51 billion reported in the previous year. However, the company has consistently exceeded consensus EPS and revenue estimates over the last four quarters, demonstrating its resilience and strong performance in the semiconductor industry.
ADI's financial metrics reflect its market position and investor confidence. With a price-to-earnings (P/E) ratio of approximately 68.51, investors are willing to pay $68.51 for every dollar of earnings. The company's low debt-to-equity ratio of 0.22 indicates a strong financial position, while a current ratio of 1.84 suggests a robust ability to cover short-term liabilities. These metrics highlight ADI's stability and potential for future growth.
Analog Devices, Inc. (NASDAQ:ADI) Sees Positive Analyst Sentiment Amid Industry Challenges
- ADI's consensus price target has been on an upward trend, indicating growing analyst optimism about the company's stock performance.
- The company's focus on expanding product offerings and strengthening its market position in sectors like automotive and high-performance analog segments is seen as a positive move.
- Despite a high valuation at 33.64 times earnings and a modest stock price increase of 0.4% since the last earnings report, the potential growth in AI and EV battery management sectors could justify the current market sentiment.
Analog Devices, Inc. (NASDAQ:ADI) is a key player in the semiconductor industry, specializing in data conversion, signal processing, and power management technologies. The company designs and manufactures integrated circuits and subsystems for various markets, including automotive, communications, and industrial sectors. ADI competes with other semiconductor giants like Texas Instruments and NXP Semiconductors.
Over the past year, ADI has seen a positive trend in its consensus price target, reflecting growing analyst optimism. Last month, the average price target was $250, up from $240 last quarter and $239.33 last year. This upward trend suggests confidence in ADI's stock performance, likely driven by its strategic focus on expanding product offerings and strengthening its market position.
Despite challenges in the semiconductor industry, ADI has shown resilience with sequential revenue growth, particularly in the automotive and high-performance analog segments. The company's valuation is high at 33.64 times earnings, but anticipated growth in AI and EV battery management could justify this. Morgan Stanley, however, has set a more conservative price target of $178.
ADI's stock price has increased modestly by 0.4% since its last earnings report 30 days ago. This slight uptick raises questions about the sustainability of this trend. Investors should monitor upcoming earnings announcements and industry developments to assess future stock performance and potential growth opportunities.
In summary, ADI's positive price target trend and strategic initiatives in expanding its product offerings and market presence contribute to analysts' optimism. However, the high valuation and modest recent stock price increase suggest a cautious approach, with attention to future earnings and industry trends being crucial for investors.
Analog Devices Inc. (NASDAQ:ADI) Bullish Price Target Amid Upcoming Earnings Report
- David Williams from Williams Trading has set a bullish price target of $245 for NASDAQ:ADI, indicating a potential increase of approximately 14.16%.
- Despite an anticipated 11% decline in earnings per share and a 6.2% decrease in revenues for Q1, the consensus EPS estimate has remained stable over the past 30 days.
- ADI's current stock price of $214.61 reflects an increase of approximately 2.52%, with a trading volume highlighting active investor interest.
Analog Devices Inc. (NASDAQ:ADI) is a prominent player in the semiconductor industry, known for its innovative solutions in analog and digital signal processing. The company designs and manufactures a wide range of products, including integrated circuits and sensors, which are used in various applications such as automotive, communications, and industrial sectors. ADI competes with other major semiconductor companies like Texas Instruments and NXP Semiconductors.
On February 14, 2025, David Williams from Williams Trading set a bullish price target of $245 for ADI. At the time, the stock was trading at $214.61, suggesting a potential increase of approximately 14.16%. This optimistic outlook comes as ADI prepares to release its Q1 earnings report. Analysts project earnings of $1.54 per share, an 11% decline from the same quarter last year. Despite this, the price target indicates confidence in ADI's future performance.
The company's anticipated revenues for Q1 are $2.36 billion, marking a 6.2% decrease from the previous year. Despite these declines, the consensus earnings per share (EPS) estimate has remained unchanged over the past 30 days. This stability in estimates suggests that analysts have not revised their initial projections, which can be a positive sign for investors. Revisions to earnings estimates are crucial as they can significantly influence investor actions and the short-term price performance of a stock.
Currently, ADI's stock is priced at $214.61, reflecting an increase of approximately 2.52% or $5.27. During the trading day, the stock reached a low of $210.64 and a high of $215.15. Over the past year, ADI has seen a high of $244.14 and a low of $182.57. The company's market capitalization stands at approximately $106.47 billion, indicating its significant presence in the market.
Today's trading volume for ADI is 3,938,608 shares, highlighting active investor interest. As highlighted by Benzinga, the stock's performance and the upcoming earnings report are key factors to watch. The strong correlation between trends in earnings estimate revisions and stock price movements underscores the importance of these projections for investors.
Analog Devices Inc. (NASDAQ:ADI) Upgraded by Wells Fargo Amid Earnings Challenges
- Wells Fargo upgraded Analog Devices Inc. (NASDAQ:ADI) to an "Overweight" rating, indicating a positive outlook despite anticipated earnings declines.
- ADI's Q1 earnings report is expected to show an 11% decline in earnings per share and a 6.2% decrease in revenues, yet consensus EPS estimates have remained stable.
- The stock's recent trading range reflects market anticipation of the upcoming earnings announcement, with a significant market capitalization of approximately $106.47 billion.
Analog Devices Inc. (NASDAQ:ADI) is a prominent player in the semiconductor industry, specializing in the design and manufacturing of analog, mixed-signal, and digital signal processing integrated circuits. These components are crucial in a wide range of applications, from consumer electronics to industrial automation. ADI competes with other major semiconductor companies like Texas Instruments and NXP Semiconductors.
On February 14, 2025, Wells Fargo upgraded ADI to an "Overweight" rating, signaling a positive outlook on the stock. At the time, ADI's stock price was $214.61, reflecting a 2.52% increase or $5.27. This upgrade was part of a new coverage initiation, as highlighted by Benzinga, and suggests confidence in ADI's future performance despite upcoming earnings challenges.
ADI is preparing to release its Q1 earnings report for the quarter ending January 2025. Analysts expect earnings of $1.54 per share, an 11% decline from the previous year. Revenues are projected at $2.36 billion, a 6.2% decrease. Despite these anticipated declines, the consensus earnings per share (EPS) estimate has remained stable over the past 30 days, indicating no revisions by analysts.
This stability in EPS estimates is significant for investors, as changes in earnings estimates often influence short-term stock price movements. As the earnings announcement nears, investors will watch for any revisions to these estimates, which could impact ADI's stock price. The stock's recent trading range, with a low of $210.64 and a high of $215.15, reflects market anticipation.
ADI's market capitalization is approximately $106.47 billion, with a trading volume of 3,938,608 shares on the NASDAQ exchange. Over the past year, ADI's stock has seen a high of $244.14 and a low of $182.57. These figures highlight the stock's volatility and the potential impact of upcoming earnings on its market performance.
Analog Devices Named Citi's Top Pick in U.S. Semiconductors Amid Lower Risk in Automotive Sector
Analog Devices (NASDAQ:ADI) has been named Citi’s new top pick in the U.S. semiconductor sector. The analysts moved Analog Devices to the top position due to its lower downside risk in the automotive sector compared to other analog semiconductor companies, especially after recently announcing earnings. Meanwhile, Broadcom and AMD continue to hold the second and third spots, with both remaining top picks for AI-related investments, though there are concerns about potential margin pressures in their AI segments.
Citi also upgraded Texas Instruments to fourth place, citing expectations of rising gross margins, despite concerns over the fourth-quarter 2024 guidance. Any potential share-price weakness is seen as a buying opportunity. Micron was downgraded to fifth, with Citi expecting lower consensus estimates in the near term, but the firm believes the ongoing DRAM inventory correction will end within a few quarters. Microchip remains in the last position among Citi’s Buy-rated semiconductor stocks, pending further catalysts for growth.
Analog Devices Stock Gains 5% on Q2 Beat
Analog Devices (NASDAQ:ADI) saw its shares rise by more than 5% in pre-market today following better-than-expected Q2 results and guidance.
For Q2, the company reported earnings per share (EPS) of $1.40, exceeding the Street estimate of $1.26. Revenue was $2.16 billion, above the consensus forecast of $2.1 billion.
The adjusted gross margin for the quarter was 66.7%, slightly below the projected 67.1%, while the adjusted operating margin was 39%, surpassing the expected 37.7%.
Looking ahead to Q3/24, Analog Devices projects EPS between $1.40 and $1.60, significantly higher than the Street expectation of $1.35. Revenue is anticipated to be between $2.17 billion and $2.37 billion, compared to the consensus of $2.16 billion.
CEO and Chairman Vincent Roche noted that despite ongoing macroeconomic and inventory challenges, the company delivered second-quarter revenue above the midpoint of its outlook. He attributed the strong performance to a resilient business model and disciplined cost control, which resulted in higher-than-expected profitability and EPS.
Roche also expressed optimism about the future, citing stabilizing inventory rationalization and improving new orders as indicators of a potential cyclical recovery starting in the third quarter.
