📊 ADI Key Takeaways
Is Analog Devices Inc. (ADI) a Good Investment?
Analog Devices demonstrates exceptional operational performance with industry-leading profitability margins (66% gross, 35% operating, 30% net) coupled with accelerating revenue (+17% YoY) and earnings growth (+39% YoY). The company maintains fortress-like balance sheet strength with minimal leverage (0.21x debt/equity), robust free cash flow generation ($2.0B, 29% margin), and conservative capital allocation positioning it well for semiconductor cyclicality.
Analog Devices shows high-quality semiconductor fundamentals with strong pricing power, reflected in a 64.7% gross margin, 31.5% operating margin, and 39.8% free cash flow margin. The latest period also shows healthy growth acceleration, with revenue up 16.9% and net income up 38.7% year over year, while leverage remains manageable and liquidity is solid. The main caveat is that returns on assets and equity are modest relative to its large balance sheet, so sustained execution and cash conversion matter.
Analog Devices Inc. Key Strengths (ADI)
- Exceptional profitability margins (66.1% gross, 35.0% operating, 29.6% net) indicate strong pricing power and operational leverage
- Accelerating earnings growth (39% YoY) significantly outpacing revenue growth (17% YoY) demonstrates operating leverage and margin expansion
- Fortress balance sheet with minimal leverage (0.21x D/E), strong interest coverage (15.4x), and $2.4B cash generating $2.0B annual free cash flow
- High-quality cash generation with FCF margin of 29.4% and modest capital requirements ($247M CapEx)
- High profitability, with gross margin of 64.7% and operating margin of 31.5%, indicating strong product mix and pricing power
- Strong earnings and cash flow quality, with net income up 38.7% year over year and free cash flow of $1.26B on $3.16B revenue
- Healthy financial position, supported by $2.91B cash, 1.76x current ratio, and low debt-to-equity of 0.21x
ADI Stock Risks: Analog Devices Inc. Investment Risks
- ROE (5.9%) and ROA (4.2%) remain relatively subdued despite strong profitability, suggesting capital deployment inefficiency or excess balance sheet capacity
- Semiconductor industry exposure to cyclical downturns, potential demand normalization post-pandemic, and macro-dependent customer spending
- Competitive pressure from larger integrated device manufacturers and emerging competitors in key analog/mixed-signal markets
- Semiconductor demand remains cyclical, so current growth and margin strength may soften if end-market conditions weaken
- Interest coverage of 6.5x is acceptable but not exceptionally strong, leaving some sensitivity to higher financing costs or lower operating profit
- ROE of 2.5% and ROA of 1.7% are relatively low, suggesting the large asset and equity base is not yet generating strong returns
Key Metrics to Watch
- Operating margin sustainability as revenue growth moderates
- Return on equity improvement trajectory and capital allocation efficiency
- Free cash flow conversion rate and customer concentration trends
- Revenue growth versus net income growth to confirm operating leverage is sustainable
- Free cash flow margin and interest coverage to track cash generation strength and debt servicing capacity
Analog Devices Inc. (ADI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 29.4% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments.
ADI Profit Margin, ROE & Profitability Analysis
ADI vs Technology Sector: How Analog Devices Inc. Compares
How Analog Devices Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Analog Devices Inc. Stock Overvalued? ADI Valuation Analysis 2026
Based on fundamental analysis, Analog Devices Inc. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Analog Devices Inc. Balance Sheet: ADI Debt, Cash & Liquidity
ADI Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Analog Devices Inc.'s revenue has grown significantly by 68% over the 5-year period, indicating strong business expansion. The most recent EPS of $6.55 reflects profitable operations.
ADI Revenue Growth, EPS Growth & YoY Performance
ADI Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2026 | $2.6B | $569.8M | $1.14 |
| Q1 2026 | $2.4B | $391.3M | $0.78 |
| Q3 2025 | $2.3B | $392.2M | $0.79 |
| Q2 2025 | $2.2B | $302.2M | $0.61 |
| Q1 2025 | $2.4B | $391.3M | $0.78 |
| Q3 2024 | $2.3B | $392.2M | $0.79 |
| Q2 2024 | $2.2B | $302.2M | $0.61 |
| Q1 2024 | $2.5B | $462.7M | $0.93 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Analog Devices Inc. Dividends, Buybacks & Capital Allocation
ADI SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Analog Devices Inc. (CIK: 0000006281)
📋 Recent SEC Filings
❓ Frequently Asked Questions about ADI
What is the AI rating for ADI?
Analog Devices Inc. (ADI) has a Combined AI Grade of A from Claude (A+) and ChatGPT (A) with 85% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ADI's key strengths?
Claude: Exceptional profitability margins (66.1% gross, 35.0% operating, 29.6% net) indicate strong pricing power and operational leverage. Accelerating earnings growth (39% YoY) significantly outpacing revenue growth (17% YoY) demonstrates operating leverage and margin expansion. ChatGPT: High profitability, with gross margin of 64.7% and operating margin of 31.5%, indicating strong product mix and pricing power. Strong earnings and cash flow quality, with net income up 38.7% year over year and free cash flow of $1.26B on $3.16B revenue.
What are the risks of investing in ADI?
Claude: ROE (5.9%) and ROA (4.2%) remain relatively subdued despite strong profitability, suggesting capital deployment inefficiency or excess balance sheet capacity. Semiconductor industry exposure to cyclical downturns, potential demand normalization post-pandemic, and macro-dependent customer spending. ChatGPT: Semiconductor demand remains cyclical, so current growth and margin strength may soften if end-market conditions weaken. Interest coverage of 6.5x is acceptable but not exceptionally strong, leaving some sensitivity to higher financing costs or lower operating profit.
What is ADI's revenue and growth?
Analog Devices Inc. reported revenue of $6.8B.
Does ADI pay dividends?
Analog Devices Inc. pays dividends, with $1,020.7M distributed to shareholders in the trailing twelve months.
Where can I find ADI SEC filings?
Official SEC filings for Analog Devices Inc. (CIK: 0000006281) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ADI's EPS?
Analog Devices Inc. has a diluted EPS of $4.09.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is ADI's fundamental grade?
Based on our AI fundamental analysis in June 2026, Analog Devices Inc. has a A grade with 85% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is ADI stock overvalued or undervalued?
Valuation metrics for ADI: ROE of 5.9% (sector avg: 22%), net margin of 29.6% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
What is ADI's AI grade for 2026?
Our dual AI analysis gives Analog Devices Inc. a combined A grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is ADI's free cash flow?
Analog Devices Inc.'s operating cash flow is $2.2B, with capital expenditures of $247.0M. FCF margin is 29.4%.
How does ADI compare to other Technology stocks?
Vs Technology sector averages: Net margin 29.6% (avg: 18%), ROE 5.9% (avg: 22%), current ratio 1.75 (avg: 2.5).