Analog Devices Inc

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ADI : NASDAQ : Technology
$82.01 -0.36 | -0.44%
Today's Range: 81.52 - 82.39
Avg. Daily Volume: 2698900.0
02/22/17 - 1:10 PM ET

Financial Analysis


ANALOG DEVICES's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income significantly, outpacing the average growth rates of competitors within its industry. ANALOG DEVICES is extremely liquid. Currently, the Quick Ratio is 8.37 which clearly shows the ability to cover any short-term cash needs. ADI managed to increase the liquidity from the same period a year ago, despite already having very strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has increased by 6.23% 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 Q1 FY17 Q1 FY16
Net Sales ($mil)984.45769.43
EBITDA ($mil)398.48265.53
EBIT ($mil)344.15213.97
Net Income ($mil)217.13164.5


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)6317.073789.47
Total Assets ($mil)10203.377598.08
Total Debt ($mil)3805.41730.95
Equity ($mil)5306.434994.86


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin69.7766.66
EBITDA Margin40.4734.5
Operating Margin34.9627.81
Sales Turnover0.360.45
Return on Assets8.968.98
Return on Equity17.2213.66
Debt Q1 FY17 Q1 FY16
Current Ratio8.917.82
Debt/Capital0.420.26
Interest Expense0.013.06
Interest Coverage0.016.38


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)308.17310.02
Div / share0.420.4
EPS0.690.52
Book value / share17.2216.11
Institutional Own % n/a n/a
Avg Daily Volume2675756.02447601.0

Valuation


BUY. The current P/E ratio indicates a premium compared to an average of 27.92 for the Semiconductors & Semiconductor Equipment industry and a value on par with the S&P 500 average of 26.35. Conducting a second comparison, its price-to-book ratio of 4.76 indicates a significant premium versus the S&P 500 average of 2.94 and a premium versus the industry average of 4.36. 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 premium 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 27.98 Peers 27.92   ADI 18.34 Peers 16.24

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

ADI is trading at a valuation on par with its peers.

 

Premium. 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 premium 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 21.15 Peers 20.11   ADI 0.81 Peers 1.64

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

ADI is trading at a valuation on par with 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 4.76 Peers 4.36   ADI 36.27 Peers 0.99

Average. 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 valuation on par with 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 6.95 Peers 4.74   ADI 5.94 Peers 18.87

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 significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

ADI significantly trails its peers on the basis of sales growth

 

 

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