Analog Devices (ADI) Gains But Lags Market: What You Should Know

Analog Devices (ADI) closed the most recent trading day at $162.32, moving +1.23% from the previous trading session. This move lagged the S&P 500's daily gain of 1.61%. Elsewhere, the Dow gained 1.45%, while the tech-heavy Nasdaq added 0.05%.

Heading into today, shares of the semiconductor maker had lost 2.36% over the past month, outpacing the Computer and Technology sector's loss of 6.03% and lagging the S&P 500's loss of 1.42% in that time.

Investors will be hoping for strength from Analog Devices as it approaches its next earnings release. On that day, Analog Devices is projected to report earnings of $2.12 per share, which would represent year-over-year growth of 37.66%. Meanwhile, our latest consensus estimate is calling for revenue of $2.86 billion, up 72.26% from the prior-year quarter.

ADI's full-year Zacks Consensus Estimates are calling for earnings of $8.43 per share and revenue of $11.38 billion. These results would represent year-over-year changes of +30.5% and +55.44%, respectively.

Investors should also note any recent changes to analyst estimates for Analog Devices. These revisions help to show the ever-changing nature of near-term business trends. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate has moved 1.29% higher. Analog Devices currently has a Zacks Rank of #2 (Buy).

Investors should also note Analog Devices's current valuation metrics, including its Forward P/E ratio of 19.03. For comparison, its industry has an average Forward P/E of 16.7, which means Analog Devices is trading at a premium to the group.

Investors should also note that ADI has a PEG ratio of 1.55 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor - Analog and Mixed industry currently had an average PEG ratio of 0.64 as of yesterday's close.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 53, which puts it in the top 21% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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