Analog Devices Inc

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ADI : NASDAQ : Technology
$60.40 | %
Today's Range: 59.66 - 60.44
Avg. Daily Volume: 2,027,300
07/22/16 - 4:00 PM ET

Financial Analysis


ANALOG DEVICES's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in revenues underperformed the average competitor within the industry, the net income growth did not. ANALOG DEVICES is extremely liquid. Currently, the Quick Ratio is 6.07 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 1.82% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)778.77821.02
EBITDA ($mil)292.0333.99
EBIT ($mil)240.08276.8
Net Income ($mil)170.57205.34


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)3754.083074.78
Total Assets ($mil)7570.297048.48
Total Debt ($mil)1731.34873.06
Equity ($mil)4873.74964.21


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin70.2270.56
EBITDA Margin37.4940.68
Operating Margin30.8333.71
Sales Turnover0.450.44
Return on Assets8.559.55
Return on Equity13.2913.56
Debt Q2 FY16 Q2 FY15
Current Ratio6.763.79
Debt/Capital0.260.15
Interest Expense18.466.88
Interest Coverage13.0140.23


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)307.35313.54
Div / share0.420.4
EPS0.550.65
Book value / share15.8615.83
Institutional Own % n/a n/a
Avg Daily Volume2026027.02170843.0

Valuation


BUY. The current P/E ratio indicates a discount compared to an average of 35.97 for the Semiconductors & Semiconductor Equipment industry and a premium compared to the S&P 500 average of 25.05. To use another comparison, its price-to-book ratio of 3.78 indicates a premium versus the S&P 500 average of 2.81 and a discount versus the industry average of 4.20. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, ANALOG DEVICES proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
ADI 29.24 Peers 35.97   ADI 19.78 Peers 26.17

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

ADI is trading at a discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

ADI is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
ADI 18.94 Peers 18.96   ADI 1.16 Peers 2.94

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

ADI is trading at a premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

ADI trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ADI 3.78 Peers 4.20   ADI -3.76 Peers -6.14

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

ADI is trading at a discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

ADI is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ADI 5.43 Peers 4.88   ADI 8.14 Peers 4.47

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

ADI is trading at a premium to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

ADI has a sales growth rate that significantly exceeds its peers.

 

 

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