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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Analog Devices, Inc. (XNAS:ADI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ADI
Name:
ANALOG DEVICES, INC. (XNAS:ADI)
Sector:
745.28M
Industry:
Semiconductors
CEO:
Mr. Vincent Roche
Total Employees:
24,700
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -84.65% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ANALOG DEVICES, INC.(ADI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SEMICONDUCTORS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
148.63
One Month Price Target:
$149.6
Six Month Price Target :
$154.44
Likely Price in One Year's Time:
Ticker:
$160.26
Likely Trading Range Today Under (Normal Volatility)
$148.11
Price Upper limit ($) :
$149.35
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$141.2
This week:
$132.03
This month :
$115.42
Other Primary facts
Market Cap:
76.24B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
514.34M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.7%
-16.61%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$183.07
$167.19
$114.19
$130.07
Medium risk (<10%) entry points
Buy Call
Sell Call
$162.02
Buy Put:
Sell Put:
$158.63
$135.19
$138.63
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ADI
Sharpe Ratio:
2.35%
Comparison:
ADI, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -24.11% lower than the industry
& ratio is 3.10% higher than the market/S&P 500 average
Average Returns/Yield of
ADI
Daily returns:
0.07%
Weekly returns:
0.33%
Monthly returns:
1.34%
Yearly returns:
31.95%
Comparison of returns:
Average annual returns/yield (last 3 years) is -49.83% below industry average
Classification:
ADI, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.86
Statistical test of Returns:
ADI has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.47%
Weekly Volatility:
5.51%
Monthly Volatility:
11.02%
Yearly Volatility:
38.19%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.48%
Volatility in last five trading days has been -80.40% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.00%
Weekly VaR:
-11.17%
Monthly VaR:
-22.34%
How Much Can the price of
ADI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-77.39%
This translates to price declining to:
$120.40
This translates to price declining to:
$33.60
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
ADI is a 57.69% riskier investment compared to the market/S&P 500 & is 35.09% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -30.54% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ADI
Beta in relation to market/S&P 500--1.16
Expected beta in 1 year's time:
1.012
Expected beta in 3 year's time:
1.431
Unlevered (debt free) Beta:
0.996
Beta in relation to Nasdaq (XNAS):
1.092
Beta in relation to all global stocks::
0.866
Beta Comparison & Analysis
Beta of competitors/peers::
1.468
Beta is -20.71% lower than peers
Average Industry Beta:
1.41
Beta is -17.45% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
1.54%
Sustainable growth rate is -94.42% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.049
Alpha is -74.39% below industry average alpha yield
Alpha is 312% higher than market/& is unsustainably high
Analysis of Cost of Capital of
ADI
Equity cost of capital:
0.111
Equity cost of capital is -13.16% below industry mean WACC
Unlevered (without debt) cost of capital:
9.51%
Before-tax cost of debt:
3.21%
After-tax cost of debt:
2.54%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.54%
WACC is -3.21% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$18.97
Revenue growth rate per share of (3Y):
2.04
Annual revenue growth rate is -67.50% below industry average
EPS:
$3.53
Expected Annual growth rate of EPS (3Y):
-4.85%
Expected future EPS growth rate is -109.30% lower than the Semiconductors industry
Free cash flow (FCF) per share:
$6.27
Balance sheet equity growth per share: 47.00%
Equity growth rate per share is 231.97% higher than the industry
Debt per share
$12.16
EBITDA per share
$7.08
Valuation Analysis Today of
ADI
P/E Ratio:
41.16
P/E Ratio of Competitors/Peers:
235.27
P/E ratio is -82.50% lower than main peers & is -0.75% lower than the industry
Stock price/value with industry average P/E ratio: $146.41
ADI is 1.51% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $68.52
Present value of the expected future dividends only: $40.09
P/S (Price to Sales ratio):
7.84
Price to sales ratio is -3.58% below the industry mean
P/B (Price to book value ratio):
2.04
Price to free cash flow: 23.72
Price to free cash flow ratio is -65.43% lower than the industry
Net income growth rate (3Y):
-14.01%
Net income growth rate is -75.54% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 22.08%
Dividend yeild: 1.95%
Previous Dividend: $0.76
Previous adjusted dividend: $0.76
Previous Dividend: $2.90
Expected next dividend best case: $0.82
Expected next dividend worst case: $0.70
Average dividend payment (long-term): $0.66
Average dividend increase/decrease (growth rate) % per period: 3.63%
Expected next dividend payment date: 09/07/2022
Expected next dividend record date: 29/08/2022
Expected next dividend declaration date: 15/08/2022
Previous dividend payment date: 06/09/2022
Previous dividend record date: 31/05/2022
Previous dividend declaration date: 17/05/2022
Dividend History:
2022-05-27--$0.76
2021-12-02--$0.69
2021-05-27--$0.69
2022-02-24--$0.76
2021-08-26--$0.69
2021-02-25--$0.69
Dividend growth rate is 36.72% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
16.71%
Net debt to equity ratio:
11.92%
Debt to assets ratio:
12.21%
Net debt to assets ratio:
8.71%
Debt-to-asset ratio is -68.68% below industry average
Ability to repay debt:
Interest coverage ratio:
18.13
Interest coverage ratio is -44.70% less than industry average
Looking forward:
Debt growth rate:
32.60%
Annual debt growth is -64% lower than industry average debt growth rate
Debt repayment rate in last quarter: 7.66%
Analysis of Key Statistics
Correlation of price movement with the market:
0.796
Statistical significance of correlation:
ADI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.627
Stock price is 26.86% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.627
Correlation of price movement with Nasdaq (^IXIC):
0.005
Covariance of price movement with the market:
0.007
Kurtosis
7.476
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.177
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
ADI
Gross Profit Margin Ratio:
235%
Operating Profit Margin Ratio:
20.42%
Operating profit margin is -13.22% lower than the industry
Net Profit Margin Ratio:
235%
Effective Tax Rate:
-1.45%
Effective tax rate is -109.59% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
4.39%
Return on equity (ROE) is -84.65% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.21%
Return on assets (ROA) is -75.64% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
2.09
Current ratio is -48.62% below industry average
Cash Conversion Cycle (days):
50.6
Cash conversion cycle is -8.23% below industry average
The remaining useful life of property plant & equipment is: 9.4 years
Stock based compensation to net income ratio:
5.29%
In-depth Efficiency Analysis
Revenue generated per employee:
394.9K
Each employee generates -36% less revenue than industry average revenue per employee
EBITDA generated per employee:
147.4K
Each employee generates -37% less EBITDA than industry average revenue per employee
Profit generated per employee:
66.5K
Each employee generates -59% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
30.2K
Each employee generates 9% more free cash flow than industry average revenue per employee
Assets/Capital per employee
1.9M
Each employee generates 9% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 23.38%
Growth rate in R&D investment/expenditure is 65.12% higher than the industry
Competitors/Peer firms of
ADI
LAM RESEARCH CORPORATION (XNAS:LRCX)
ATLASSIAN CORPORATION PLC (XNAS:TEAM)
FISERV, INC. (XNAS:FISV)
MARVELL TECHNOLOGY, INC (XNAS:MRVL)
KLA Corporation (XNAS:KLAC)
WORKDAY, INC. (XNAS:WDAY)
COINBASE GLOBAL, INC. (XNAS:COIN)
NXP Semiconductors NV (XNAS:NXPI)
AUTODESK, INC. (XNAS:ADSK)
Current Analyst Ratings
Strong buy�25%
Buy�42%
Hold�42%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/30/22
Revenue:
9.75B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
4.07B
5.69B
1.55B
-
1.13B
-
828.22M
3.51B
1.50M
200.79M
1.82B
3.64B
1.99B
1.64B
1.62B
- 23437.00K
1.64B
Statement of Cash Flow
Date:
Period:
569.81M
Differed Income Tax :
- 34651.00K
Stock Based Compensation :
86.94M
Change in Working Capital :
- 315410.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
269.65M
Net Cash Provided by Operating Activities:
856.41M
Investments in PP&E:
- 111133.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
1/29/22
2022
Q1
1.79B
-
1.79B
1.64B
972.57M
236.80M
4.64B
2.04B
26.94B
14.76B
-
2.32B
521.01M
46.58B
-
51.22B
436.23M
-
400.42M
-
1.79B
2.22B
6.25B
1.36B
11.57B
-
13.79B
87.22M
7.43B
- 188618.0K
30.09B
January 29, 2022 at 7:00:00 AM
7.57B
37.43B
51.22B
-
6.25B
4.5B
-
7.82M
- 103309.00K
- 519116.00K
-
- 76019.00K
- 362645.00K
20.51M
- 937268.00K
- 3401.00K
- 187565.00K
1.79B
1.98B
856.41M
- 111133.00K
745.28M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
ADI
2023
2024
2025
2026
2027
$161.06
$358.28
$386.31
$416.54
$449.13