NEW YORK (TheStreet) -- Analog Devices (ADI) stock moved 5% higher over Monday's session on news it had agreed to buy chipmaker Hittite Microwave (HITT) in an all-cash deal worth $78 per share. The company expects the transaction to close in the third quarter and that the deal will be accretive to gross margins and earnings.
By market close, shares had added 5% to $55.31.
- ADI's revenue growth has slightly outpaced the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 5.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ADI's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 9.05, which clearly demonstrates the ability to cover short-term cash needs.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- ANALOG DEVICES has improved earnings per share by 13.5% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, ANALOG DEVICES increased its bottom line by earning $2.14 versus $2.13 in the prior year. This year, the market expects an improvement in earnings ($2.35 versus $2.14).
- The gross profit margin for ANALOG DEVICES is currently very high, coming in at 70.01%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 26.98% is above that of the industry average.
- You can view the full analysis from the report here: ADI Ratings Report
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV