In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Analog Devices ADI in relation to its major competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer 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 | 28.85 | 2.64 | 7.77 | 1.39% | $1.18 | $1.65 | -16.36% |
| NVIDIA Corp | 62.78 | 35.34 | 26.41 | 30.42% | $10.96 | $13.4 | 205.51% |
| Taiwan Semiconductor Manufacturing Co Ltd | 18.29 | 4.76 | 7.38 | 6.46% | $392.33 | $296.64 | -10.83% |
| Broadcom Inc | 32.11 | 20.67 | 12.63 | 15.3% | $5.3 | $6.41 | 4.09% |
| Advanced Micro Devices Inc | 1230.45 | 3.98 | 9.94 | 0.54% | $1.13 | $2.75 | 4.22% |
| Qualcomm Inc | 21.10 | 7.10 | 4.33 | 7.05% | $2.06 | $4.75 | -24.26% |
| Texas Instruments Inc | 21.60 | 9.11 | 8.44 | 10.44% | $2.34 | $2.81 | -13.53% |
| ARM Holdings PLC | 386.74 | 14.58 | 24.53 | -2.45% | $-0.12 | $0.76 | 27.94% |
| Microchip Technology Inc | 18.55 | 6.57 | 5.22 | 9.66% | $1.1 | $1.53 | 8.74% |
| STMicroelectronics NV | 10.13 | 2.75 | 2.55 | 7.28% | $1.69 | $2.11 | 2.55% |
| ON Semiconductor Corp | 16 | 4.57 | 4.27 | 8.05% | $0.87 | $1.03 | -0.54% |
| GLOBALFOUNDRIES Inc | 22.45 | 2.92 | 4.15 | 2.34% | $0.64 | $0.53 | -10.7% |
| United Microelectronics Corp | 8.86 | 1.77 | 2.61 | 4.72% | $29.0 | $20.46 | -24.3% |
| ASE Technology Holding Co Ltd | 15.49 | 1.92 | 0.95 | 3.06% | $28.07 | $24.92 | -18.27% |
| First Solar Inc | 37.87 | 2.84 | 5.67 | 4.35% | $0.37 | $0.38 | 27.37% |
| Skyworks Solutions Inc | 17.16 | 2.77 | 3.53 | 4.09% | $0.4 | $0.48 | -13.37% |
| Lattice Semiconductor Corp | 43.28 | 14.50 | 12.40 | 8.96% | $0.07 | $0.13 | 11.4% |
| Universal Display Corp | 41.70 | 6.16 | 14.57 | 3.77% | $0.06 | $0.11 | -12.13% |
| Rambus Inc | 24.39 | 7.19 | 15.28 | 10.86% | $0.12 | $0.08 | -6.19% |
| MACOM Technology Solutions Holdings Inc | 67.02 | 6.51 | 9.46 | 2.63% | $0.05 | $0.09 | -15.59% |
| Allegro Microsystems Inc | 22.32 | 5.09 | 5.27 | 6.18% | $0.09 | $0.16 | 15.92% |
| Average | 105.91 | 8.05 | 8.98 | 7.19% | $23.83 | $18.98 | 7.9% |
Through an analysis of Analog Devices, we can infer the following trends:
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A Price to Earnings ratio of 28.85 significantly below the industry average by 0.27x suggests undervaluation. This can make the stock appealing for those seeking growth.
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With a Price to Book ratio of 2.64, significantly falling below the industry average by 0.33x, it suggests undervaluation and the possibility of untapped growth prospects.
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Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 7.77, which is 0.87x the industry average.
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With a Return on Equity (ROE) of 1.39% that is 5.8% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
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The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.18 Billion, which is 0.05x below the industry average. This potentially indicates lower profitability or financial challenges.
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With lower gross profit of $1.65 Billion, which indicates 0.09x below the industry average, the company may experience lower revenue after accounting for production costs.
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The company's revenue growth of -16.36% is significantly lower compared to the industry average of 7.9%. This indicates a potential fall in the company's sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its equity.
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 comparing Analog Devices with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
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When considering the debt-to-equity ratio, Analog Devices exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.2, which can be perceived as a positive aspect by 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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