📊 ADI Key Takeaways
Is Analog Devices Inc. (ADI) a Good Investment?
Analog Devices demonstrates exceptional operational excellence with robust profitability metrics (64.7% gross margin, 31.4% operating margin) and strong earnings growth (+38.7% YoY net income). The company maintains fortress-like balance sheet strength with conservative leverage (0.21x debt/equity), healthy liquidity (1.76x current ratio), and impressive free cash flow generation ($1.3B, 39.8% FCF margin), indicating sustainable growth capacity.
Analog Devices shows high-quality semiconductor fundamentals with strong pricing power, reflected in a 64.7% gross margin, 31.5% operating margin, and 39.8% free cash flow margin. The latest period also shows healthy growth acceleration, with revenue up 16.9% and net income up 38.7% year over year, while leverage remains manageable and liquidity is solid. The main caveat is that returns on assets and equity are modest relative to its large balance sheet, so sustained execution and cash conversion matter.
Why Buy Analog Devices Inc. Stock? ADI Key Strengths
- Outstanding profitability: 26.3% net margin with strong YoY earnings growth of 38.7%
- Revenue growth momentum: 16.9% YoY increase demonstrates market strength in semiconductor demand
- Exceptional cash generation: $1.3B free cash flow represents 39.8% of revenue, enabling reinvestment and shareholder returns
- Strong balance sheet: Debt-to-equity of 0.21x and interest coverage of 6.5x provide financial flexibility
- High liquidity: 1.76x current ratio and 1.35x quick ratio support operational needs
- High profitability, with gross margin of 64.7% and operating margin of 31.5%, indicating strong product mix and pricing power
- Strong earnings and cash flow quality, with net income up 38.7% year over year and free cash flow of $1.26B on $3.16B revenue
- Healthy financial position, supported by $2.91B cash, 1.76x current ratio, and low debt-to-equity of 0.21x
ADI Stock Risks: Analog Devices Inc. Investment Risks
- Low return on equity (2.5%) and ROA (1.7%) suggest significant underutilization of asset base relative to earnings power
- Asset base of $48B appears disproportionate to earnings generation, indicating potential asset efficiency challenges or legacy acquisition integration
- Semiconductor sector cyclicality and competitive intensity could pressure margins if demand normalizes
- Semiconductor demand remains cyclical, so current growth and margin strength may soften if end-market conditions weaken
- Interest coverage of 6.5x is acceptable but not exceptionally strong, leaving some sensitivity to higher financing costs or lower operating profit
- ROE of 2.5% and ROA of 1.7% are relatively low, suggesting the large asset and equity base is not yet generating strong returns
Key Metrics to Watch
- Gross margin sustainability given potential pricing pressures
- Return on assets and equity improvement trajectory
- Operating cash flow consistency and free cash flow conversion ratio
- Revenue growth deceleration or reacceleration patterns
- Debt levels and leverage ratios during capital allocation cycles
- Revenue growth versus net income growth to confirm operating leverage is sustainable
- Free cash flow margin and interest coverage to track cash generation strength and debt servicing capacity
Analog Devices Inc. (ADI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 39.8% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments.
ADI Profit Margin, ROE & Profitability Analysis
ADI vs Technology Sector: How Analog Devices Inc. Compares
How Analog Devices Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Analog Devices Inc. Stock Overvalued? ADI Valuation Analysis 2026
Based on fundamental analysis, Analog Devices Inc. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Analog Devices Inc. Balance Sheet: ADI Debt, Cash & Liquidity
ADI Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Analog Devices Inc.'s revenue has grown significantly by 68% over the 5-year period, indicating strong business expansion. The most recent EPS of $6.55 reflects profitable operations.
ADI Revenue Growth, EPS Growth & YoY Performance
ADI Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $2.4B | $391.3M | $0.78 |
| Q3 2025 | $2.3B | $392.2M | $0.79 |
| Q2 2025 | $2.2B | $302.2M | $0.61 |
| Q1 2025 | $2.4B | $391.3M | $0.78 |
| Q3 2024 | $2.3B | $392.2M | $0.79 |
| Q2 2024 | $2.2B | $302.2M | $0.61 |
| Q1 2024 | $2.5B | $462.7M | $0.93 |
| Q3 2023 | $3.1B | $749.0M | $1.44 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Analog Devices Inc. Dividends, Buybacks & Capital Allocation
ADI SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Analog Devices Inc. (CIK: 0000006281)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| Apr 9, 2026 | 4 | xslF345X06/wk-form4_1775768645.xml | View → |
| Apr 9, 2026 | 4 | xslF345X06/wk-form4_1775768622.xml | View → |
| Apr 9, 2026 | 4 | xslF345X06/wk-form4_1775768603.xml | View → |
| Apr 9, 2026 | 4 | xslF345X06/wk-form4_1775768583.xml | View → |
| Apr 9, 2026 | 4 | xslF345X06/wk-form4_1775768561.xml | View → |
❓ Frequently Asked Questions about ADI
What is the AI rating for ADI?
Analog Devices Inc. (ADI) has a Combined AI Rating of BUY from Claude (STRONG BUY) and ChatGPT (BUY) with 88% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ADI's key strengths?
Claude: Outstanding profitability: 26.3% net margin with strong YoY earnings growth of 38.7%. Revenue growth momentum: 16.9% YoY increase demonstrates market strength in semiconductor demand. ChatGPT: High profitability, with gross margin of 64.7% and operating margin of 31.5%, indicating strong product mix and pricing power. Strong earnings and cash flow quality, with net income up 38.7% year over year and free cash flow of $1.26B on $3.16B revenue.
What are the risks of investing in ADI?
Claude: Low return on equity (2.5%) and ROA (1.7%) suggest significant underutilization of asset base relative to earnings power. Asset base of $48B appears disproportionate to earnings generation, indicating potential asset efficiency challenges or legacy acquisition integration. ChatGPT: Semiconductor demand remains cyclical, so current growth and margin strength may soften if end-market conditions weaken. Interest coverage of 6.5x is acceptable but not exceptionally strong, leaving some sensitivity to higher financing costs or lower operating profit.
What is ADI's revenue and growth?
Analog Devices Inc. reported revenue of $3.2B.
Does ADI pay dividends?
Analog Devices Inc. pays dividends, with $484.3M distributed to shareholders in the trailing twelve months.
Where can I find ADI SEC filings?
Official SEC filings for Analog Devices Inc. (CIK: 0000006281) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ADI's EPS?
Analog Devices Inc. has a diluted EPS of $1.69.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is ADI a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Analog Devices Inc. has a BUY rating with 88% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is ADI stock overvalued or undervalued?
Valuation metrics for ADI: ROE of 2.5% (sector avg: 22%), net margin of 26.3% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
Should I buy ADI stock in 2026?
Our dual AI analysis gives Analog Devices Inc. a combined BUY rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is ADI's free cash flow?
Analog Devices Inc.'s operating cash flow is $1.4B, with capital expenditures of $109.3M. FCF margin is 39.8%.
How does ADI compare to other Technology stocks?
Vs Technology sector averages: Net margin 26.3% (avg: 18%), ROE 2.5% (avg: 22%), current ratio 1.76 (avg: 2.5).