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Analog Devices (ADI) Outpaces Stock Market Gains: What You Should Know

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Analog Devices (ADI - Free Report) closed the most recent trading day at $227.49, moving +0.72% from the previous trading session. The stock exceeded the S&P 500, which registered a gain of 0.47% for the day. Meanwhile, the Dow experienced a rise of 0.79%, and the technology-dominated Nasdaq saw an increase of 0.28%.

The semiconductor maker's stock has climbed by 0.23% in the past month, falling short of the Computer and Technology sector's gain of 3.88% and the S&P 500's gain of 3.48%.

The upcoming earnings release of Analog Devices will be of great interest to investors. The company is forecasted to report an EPS of $1.63, showcasing a 18.91% downward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $2.4 billion, down 11.58% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $6.34 per share and revenue of $9.39 billion, indicating changes of -37.17% and -23.69%, respectively, compared to the previous year.

Any recent changes to analyst estimates for Analog Devices should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. As of now, Analog Devices holds a Zacks Rank of #3 (Hold).

Digging into valuation, Analog Devices currently has a Forward P/E ratio of 35.61. This denotes no noticeable deviation relative to the industry's average Forward P/E of 35.61.

Also, we should mention that ADI has a PEG ratio of 3.75. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Semiconductor - Analog and Mixed industry held an average PEG ratio of 3.34.

The Semiconductor - Analog and Mixed industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 191, finds itself in the bottom 25% echelons of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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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