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Analog Devices (ADI) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Analog Devices (ADI) closed at $171.46, marking a -0.29% move from the previous day. This move lagged the S&P 500's daily loss of 0.28%. Meanwhile, the Dow lost 0.14%, and the Nasdaq, a tech-heavy index, lost 0.14%.

Prior to today's trading, shares of the semiconductor maker had gained 20.33% over the past month. This has outpaced the Computer and Technology sector's gain of 8.21% and the S&P 500's gain of 8.35% in that time.

Wall Street will be looking for positivity from Analog Devices as it approaches its next earnings report date. This is expected to be August 17, 2022. In that report, analysts expect Analog Devices to post earnings of $2.43 per share. This would mark year-over-year growth of 41.28%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.06 billion, up 73.85% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.23 per share and revenue of $11.83 billion, which would represent changes of +42.88% and +61.63%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Analog Devices. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Analog Devices is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Analog Devices is currently trading at a Forward P/E ratio of 18.62. This valuation marks a premium compared to its industry's average Forward P/E of 17.77.

Also, we should mention that ADI has a PEG ratio of 1.52. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Semiconductor - Analog and Mixed stocks are, on average, holding a PEG ratio of 1.02 based on yesterday's closing prices.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 187, which puts it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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