In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Analog Devices ADI and its primary competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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 | 29.37 | 2.68 | 7.91 | 1.39% | $1.18 | $1.65 | -16.36% |
| NVIDIA Corp | 81.17 | 45.69 | 34.14 | 30.42% | $10.96 | $13.4 | 205.51% |
| Broadcom Inc | 35.76 | 23.02 | 14.06 | 15.3% | $5.3 | $6.41 | 4.09% |
| Advanced Micro Devices Inc | 316.11 | 4.84 | 12 | 1.2% | $1.22 | $2.91 | 6.34% |
| Intel Corp | 107.70 | 1.72 | 3.35 | 2.57% | $5.57 | $7.05 | 9.71% |
| Qualcomm Inc | 22.78 | 7.69 | 4.67 | 7.05% | $2.06 | $4.75 | -24.26% |
| Texas Instruments Inc | 22.65 | 8.61 | 8.37 | 8.18% | $1.98 | $2.43 | -10.04% |
| ARM Holdings PLC | 402.40 | 15.18 | 25.52 | -2.45% | $-0.12 | $0.76 | 27.94% |
| Microchip Technology Inc | 18.68 | 6.61 | 5.26 | 9.66% | $1.1 | $1.53 | 8.74% |
| STMicroelectronics NV | 9.89 | 2.38 | 2.41 | 6.69% | $1.43 | $1.95 | -3.36% |
| ON Semiconductor Corp | 14.34 | 4.09 | 3.83 | 8.05% | $0.87 | $1.03 | -0.54% |
| GLOBALFOUNDRIES Inc | 21.65 | 2.82 | 4 | 2.34% | $0.64 | $0.53 | -10.7% |
| ASE Technology Holding Co Ltd | 17 | 2.11 | 1.04 | 3.06% | $28.07 | $24.92 | -18.27% |
| United Microelectronics Corp | 8.63 | 1.72 | 2.54 | 4.72% | $29.0 | $20.46 | -24.3% |
| Skyworks Solutions Inc | 18.53 | 2.69 | 3.61 | 3.76% | $0.37 | $0.51 | -1.42% |
| First Solar Inc | 33.08 | 2.48 | 4.95 | 4.35% | $0.37 | $0.38 | 27.37% |
| Lattice Semiconductor Corp | 40.04 | 13.42 | 11.47 | 8.96% | $0.07 | $0.13 | 11.4% |
| Universal Display Corp | 39.38 | 5.81 | 13.75 | 3.77% | $0.06 | $0.11 | -12.13% |
| Rambus Inc | 26.17 | 7.71 | 16.39 | 10.86% | $0.12 | $0.08 | -6.19% |
| MACOM Technology Solutions Holdings Inc | 67.37 | 6.56 | 9.51 | 2.63% | $0.05 | $0.09 | -15.59% |
| Allegro Microsystems Inc | 19.98 | 4.56 | 4.72 | 6.18% | $0.09 | $0.16 | 15.92% |
| Average | 66.17 | 8.49 | 9.28 | 6.86% | $4.46 | $4.48 | 9.51% |
By conducting a comprehensive analysis of Analog Devices, the following trends become evident:
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With a Price to Earnings ratio of 29.37, which is 0.44x 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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The current Price to Book ratio of 2.68, which is 0.32x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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The Price to Sales ratio is 7.91, which is 0.85x the industry average. This suggests a possible undervaluation based on sales performance.
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The company has a lower Return on Equity (ROE) of 1.39%, which is 5.47% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
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The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.18 Billion, which is 0.26x below the industry average. This potentially indicates lower profitability or financial challenges.
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Compared to its industry, the company has lower gross profit of $1.65 Billion, which indicates 0.37x below the industry average, potentially indicating 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 9.51%, the company is experiencing a notable slowdown in sales expansion.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
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, Analog Devices has a low ROE, indicating that it is not generating high returns on its shareholders' equity. The low EBITDA suggests that the company's operating profitability is relatively low. The low gross profit indicates that Analog Devices has a lower margin compared to its peers. Lastly, the low revenue growth suggests that the company's sales are not growing at a significant rate compared to its industry peers.
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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