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Valued at a market cap of $111.2 billion, Analog Devices, Inc. (ADI) designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems products. The Wilmington, Massachusetts-based company’s product line is composed of amplifiers and comparators, analog-to-digital converters, digital-to-analog converters, video encoders, decoders, and embedded processing products and DSPs, to name a few. It is expected to announce its fiscal Q1 earnings results on Wednesday, Feb. 19.
Ahead of this event, analysts project the semiconductor company to report a profit of $1.54 per share, down 11% from $1.73 per share in the year-ago quarter. The company has a promising trajectory of consistently beating Wall Street's earnings estimates in the last four quarters. In Q4 2024, ADI’s adjusted EPS of $1.67 outpaced the consensus estimates by a margin of 1.8%.
For fiscal 2025, analysts expect Analog Devices to report an EPS of $7.09, up 11.1% from a profit of $6.38 in fiscal 2024.
Shares of ADI have gained 13.4% over the past 52 weeks, falling behind both the S&P 500 Index's ($SPX) 25.8% return and the Technology Select Sector SPDR Fund’s (XLK) 19.8% rise over the same time frame.
On Nov. 26, shares of ADI plunged 2% after its Q4 earnings release despite delivering better-than-expected Q4 adjusted earnings of $1.67 per share and revenues of $2.4 billion. However, a 10% year-over-year decline in its top-line figure due to persistent weakness in the company’s industrial and communications markets might have lowered investor confidence.
Moreover, due to a 230 bps gross margin drop and a 360 bps adjusted operating margin fall from the year-ago quarter, ADI’s adjusted EPS declined 16.9% year-over-year. Adding to the downtick, the company provided pessimistic guidance for the first quarter of fiscal 2025 that came in below Wall Street’s estimates.
Wall Street analysts are moderately optimistic about ADI’s stock, with a "Moderate Buy" rating overall. Among 28 analysts covering the stock, 19 recommend a "Strong Buy," one suggests a “Moderate Buy,” and eight indicate “Hold.”
The mean price target for Analog Devices is $256.19, which indicates a modest 12.2% potential upside from the current levels.
