Assessing Analog Devices (ADI) Valuation After Earnings Beat Dividend Hike And Ongoing Buybacks
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Analog Devices (ADI) has jumped onto investors’ radar after reporting first quarter earnings, issuing new guidance, raising its dividend, and updating its long running share repurchase activity.
See our latest analysis for Analog Devices.
Those strong results have come alongside powerful market interest, with the share price at US$355.70 and a 30 day share price return of 11.99% and a 1 year total shareholder return of 57.16% signaling firm momentum rather than a short lived spike.
If this earnings driven move has you thinking about where else growth and capital returns might combine, it could be worth scanning 33 AI infrastructure stocks as a starting list of potential ideas beyond Analog Devices.
With earnings, guidance, dividends and buybacks all pointing in the same direction, the stock’s strong run raises a key question for you: Is Analog Devices still undervalued, or is the market already pricing in future growth?
At a last close of $355.70 versus a most-followed fair value estimate of $379.64, the current price sits below the narrative’s modeled outcome and puts the focus firmly on what is driving that gap.
Robust expansion of AI infrastructure, green energy investments, and aerospace & defense outlays is creating healthy backlog and supply-constrained opportunities in several high-value segments, likely resulting in continued revenue and profitability momentum as ADI ramps internal capacity and leverages proprietary products.
Curious what kind of revenue path and margin profile sit behind that fair value number? The most followed narrative leans on rising earnings power, richer profitability, and a future valuation multiple that still assumes meaningful discipline. The real story is how those pieces fit together over the next few years.
Result: Fair Value of $379.64 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, this story can change quickly if competition from lower cost analog suppliers erodes pricing power, or if rising manufacturing and R&D spend outpaces demand.
Find out about the key risks to this Analog Devices narrative.
The popular fair value narrative paints Analog Devices as 6.3% undervalued at $379.64, but the current P/E of 64.2x tells a different story. That ratio sits above both the US Semiconductor industry at 43.8x and an estimated fair ratio of 33.2x. This comparison points to meaningful valuation risk if sentiment cools.
