In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Analog Devices ADI against its key competitors in the Semiconductors & Semiconductor Equipment industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
Analog Devices Background
Analog Devices is a leading analog, mixed signal, and digital signal processing chipmaker. The firm has a significant market share lead in converter chips, which are used to translate analog signals to digital and vice versa. The company serves tens of thousands of customers, and more than half of its chip sales are made to industrial and automotive end markets. Analog Devices' chips are also incorporated into wireless infrastructure equipment.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Analog Devices Inc | 29.34 | 2.68 | 7.90 | 1.39% | $1.18 | $1.65 | -16.36% |
| NVIDIA Corp | 63.46 | 35.72 | 26.69 | 30.42% | $10.96 | $13.4 | 205.51% |
| Broadcom Inc | 33.67 | 21.67 | 13.24 | 15.3% | $5.3 | $6.41 | 4.09% |
| Taiwan Semiconductor Manufacturing Co Ltd | 18.62 | 4.85 | 7.51 | 6.46% | $392.33 | $296.64 | -10.83% |
| Advanced Micro Devices Inc | 1231.18 | 3.98 | 9.94 | 0.54% | $1.13 | $2.75 | 4.22% |
| Qualcomm Inc | 21.54 | 7.24 | 4.41 | 7.05% | $2.06 | $4.75 | -24.26% |
| Texas Instruments Inc | 21.40 | 9.02 | 8.36 | 10.44% | $2.34 | $2.81 | -13.53% |
| ARM Holdings PLC | 389.59 | 14.69 | 24.71 | -2.45% | $-0.12 | $0.76 | 27.94% |
| Microchip Technology Inc | 19.41 | 6.87 | 5.47 | 9.66% | $1.1 | $1.53 | 8.74% |
| STMicroelectronics NV | 10.58 | 2.87 | 2.66 | 7.28% | $1.69 | $2.11 | 2.55% |
| ON Semiconductor Corp | 16.36 | 4.67 | 4.37 | 8.05% | $0.87 | $1.03 | -0.54% |
| GLOBALFOUNDRIES Inc | 22.85 | 2.98 | 4.22 | 2.34% | $0.64 | $0.53 | -10.7% |
| United Microelectronics Corp | 8.79 | 1.75 | 2.59 | 4.72% | $29.0 | $20.46 | -24.3% |
| ASE Technology Holding Co Ltd | 16.31 | 2.02 | 1 | 3.06% | $28.07 | $24.92 | -18.27% |
| First Solar Inc | 37.24 | 2.79 | 5.58 | 4.35% | $0.37 | $0.38 | 27.37% |
| Skyworks Solutions Inc | 17.87 | 2.88 | 3.68 | 4.09% | $0.4 | $0.48 | -13.37% |
| Lattice Semiconductor Corp | 44.68 | 14.97 | 12.80 | 8.96% | $0.07 | $0.13 | 11.4% |
| Universal Display Corp | 43.19 | 6.38 | 15.09 | 3.77% | $0.06 | $0.11 | -12.13% |
| Rambus Inc | 24.77 | 7.30 | 15.52 | 10.86% | $0.12 | $0.08 | -6.19% |
| MACOM Technology Solutions Holdings Inc | 71.58 | 6.95 | 10.10 | 2.63% | $0.05 | $0.09 | -15.59% |
| Allegro Microsystems Inc | 23.08 | 5.26 | 5.45 | 6.18% | $0.09 | $0.16 | 15.92% |
| Average | 106.81 | 8.24 | 9.17 | 7.19% | $23.83 | $18.98 | 7.9% |
Upon a comprehensive analysis of Analog Devices, the following trends can be discerned:
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With a Price to Earnings ratio of 29.34, which is 0.27x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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Considering a Price to Book ratio of 2.68, which is well below the industry average by 0.33x, the stock may be undervalued based on its book value compared to its peers.
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The Price to Sales ratio is 7.9, which is 0.86x the industry average. This suggests a possible undervaluation based on sales performance.
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The Return on Equity (ROE) of 1.39% is 5.8% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.18 Billion is 0.05x below the industry average, suggesting potential lower profitability or financial challenges.
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The company has lower gross profit of $1.65 Billion, which indicates 0.09x below the industry average. This potentially indicates lower revenue after accounting for production costs.
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With a revenue growth of -16.36%, which is much lower than the industry average of 7.9%, the company is experiencing a notable slowdown in sales expansion.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When evaluating Analog Devices alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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Analog Devices exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.2.
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This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for investors.
Key Takeaways
Analog Devices has a low PE ratio, indicating that its stock price is relatively low compared to its earnings. The low PB ratio suggests that the company's stock is undervalued based on its book value. The low PS ratio indicates that the stock is trading at a low price relative to its sales. On the other hand, the low ROE, EBITDA, gross profit, and revenue growth ratios suggest that Analog Devices may be underperforming compared to its peers in the Semiconductors & Semiconductor Equipment industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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