Here’s What You Should Understand Besides the Reasons Analog Devices, Inc. (ADI) is Gaining Attention

Analog Devices (ADI): Recent Performance and Outlook

Analog Devices (ADI) has recently attracted significant attention from investors, making it worthwhile to examine the factors that could influence its short-term stock performance.

Stock Performance Overview

Over the past month, ADI's share price has climbed 13.6%, outperforming the Zacks S&P 500 composite, which slipped by 0.3%. The broader analog and mixed semiconductor sector, which includes ADI, saw a 12.6% gain during the same period. This raises the question: what might be next for ADI in the near future?

While news headlines and speculation can cause quick price swings, long-term stock movements are typically driven by fundamental factors.

Earnings Estimate Trends

At Zacks, changes in earnings forecasts are a primary focus, as a stock’s intrinsic value is closely tied to the present value of its expected future earnings. When analysts revise their earnings projections upward, it often signals improving business prospects, which can attract investors and push the stock price higher. Historical data shows a strong link between earnings estimate revisions and short-term stock price trends.

• For the current quarter, ADI is projected to earn $2.77 per share, a 49.7% increase from the same period last year. Over the past month, the consensus estimate has risen by 19%.
• For the full fiscal year, the consensus earnings estimate stands at $11.10 per share, up 42.5% year-over-year, with an 11.8% increase in the last 30 days.
• Looking ahead to the next fiscal year, analysts expect earnings of $12.33 per share, representing an 11.2% rise from the prior year, and this estimate has grown by 9.3% in the past month.

The Zacks Rank, a proprietary rating system with a strong track record, incorporates these earnings estimate changes and other related factors. Currently, ADI holds a Zacks Rank #2 (Buy), suggesting positive momentum.

Forward 12-Month EPS Estimate

Revenue Growth Projections

While earnings growth is a key indicator of financial strength, sustained revenue increases are essential for long-term profit expansion. Understanding a company’s revenue outlook is therefore critical.

• For the current quarter, ADI’s consensus revenue estimate is $3.51 billion, up 33% from a year ago.
• For the current fiscal year, projected revenue is $13.72 billion, a 24.5% increase, while next year’s estimate is $14.9 billion, up 8.6%.

Recent Results and Earnings Surprises

In the most recent quarter, ADI reported revenue of $3.16 billion, a 30.4% year-over-year increase. Earnings per share were $2.46, compared to $1.63 in the prior year.

• Revenue exceeded the consensus estimate by 1.36%.
• EPS beat expectations by 6.96%.
• ADI has surpassed consensus EPS and revenue estimates in each of the last four quarters.

Valuation Analysis

Evaluating a stock’s valuation is crucial for making informed investment decisions. Comparing current valuation ratios—such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF)—to historical averages and industry peers helps determine if a stock is fairly priced, overvalued, or undervalued.

The Zacks Value Style Score, which grades stocks from A to F based on various valuation metrics, currently assigns ADI a grade of D. This suggests the stock is trading at a premium compared to its peers.

Summary

The analysis above, along with additional resources on Zacks.com, can help investors decide whether to pay attention to the current market interest in ADI. The Zacks Rank #2 indicates that ADI may outperform the broader market in the near future.

Discover Zacks Top 10 Stocks for 2026

There’s still time to get early access to Zacks’ top 10 stock picks for 2026, curated by Director of Research Sheraz Mian. Since 2012, this portfolio has delivered a remarkable 2,530.8% return, far outpacing the S&P 500’s 570.3% gain.

Sheraz has selected the best opportunities from over 4,400 companies covered by the Zacks Rank. Be among the first to explore these high-potential stocks.