In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating Analog Devices ADI against its key competitors in the Semiconductors & Semiconductor Equipment industry. By examining key 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 | 22.87 | 2.33 | 6.68 | 2.44% | $1.53 | $1.96 | -1.07% |
| NVIDIA Corp | 111 | 41.27 | 35.03 | 23.79% | $7.41 | $9.46 | 101.48% |
| Broadcom Inc | 27.63 | 16.78 | 10.59 | 14.98% | $4.91 | $6.16 | 4.87% |
| Advanced Micro Devices Inc | 1031.36 | 3.33 | 8.33 | 0.54% | $1.13 | $2.75 | 4.22% |
| Qualcomm Inc | 18.52 | 6.23 | 3.79 | 7.05% | $2.06 | $4.75 | -24.26% |
| Texas Instruments Inc | 18.99 | 8.01 | 7.42 | 10.44% | $2.34 | $2.81 | -13.53% |
| ARM Holdings PLC | 140.37 | 13.44 | 21.30 | 2.54% | $0.15 | $0.64 | -2.46% |
| Microchip Technology Inc | 16.52 | 5.85 | 4.65 | 9.66% | $1.1 | $1.53 | 8.74% |
| STMicroelectronics NV | 8.79 | 2.39 | 2.21 | 7.28% | $1.69 | $2.11 | 2.55% |
| GLOBALFOUNDRIES Inc | 21.37 | 2.78 | 3.95 | 2.31% | $0.63 | $0.53 | -7.43% |
| ON Semiconductor Corp | 13.47 | 3.84 | 3.60 | 8.05% | $0.87 | $1.03 | -0.54% |
| United Microelectronics Corp | 7.63 | 1.87 | 2.41 | 4.72% | $29.0 | $20.46 | -24.3% |
| ASE Technology Holding Co Ltd | 14.91 | 1.85 | 0.91 | 3.06% | $28.07 | $24.92 | -18.27% |
| First Solar Inc | 32.65 | 2.45 | 4.89 | 4.35% | $0.37 | $0.38 | 27.37% |
| Skyworks Solutions Inc | 14.58 | 2.34 | 3 | 4.09% | $0.4 | $0.48 | 13.78% |
| Lattice Semiconductor Corp | 36.56 | 12.25 | 10.47 | 8.96% | $0.06 | $0.13 | 1.1% |
| Universal Display Corp | 35.06 | 5.18 | 12.25 | 3.77% | $0.06 | $0.11 | -12.13% |
| Rambus Inc | 22.18 | 6.54 | 13.89 | 10.86% | $0.12 | $0.08 | -6.19% |
| MACOM Technology Solutions Holdings Inc | 17.19 | 5.74 | 7.80 | 1.31% | $0.03 | $0.09 | -13.78% |
| Allegro Microsystems Inc | 20.12 | 4.59 | 4.76 | 6.18% | $0.09 | $0.16 | 15.92% |
| Average | 84.68 | 7.72 | 8.49 | 7.05% | $4.24 | $4.14 | 3.01% |
After thoroughly examining Analog Devices, the following trends can be inferred:
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The Price to Earnings ratio of 22.87 is 0.27x lower than the industry average, indicating potential undervaluation for the stock.
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With a Price to Book ratio of 2.33, significantly falling below the industry average by 0.3x, it suggests undervaluation and the possibility of untapped growth prospects.
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The Price to Sales ratio is 6.68, which is 0.79x 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 2.44%, which is 4.61% 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 $1.53 Billion, which is 0.36x below the industry average. This potentially indicates lower profitability or financial challenges.
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The company has lower gross profit of $1.96 Billion, which indicates 0.47x below the industry average. This potentially indicates lower revenue after accounting for production costs.
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The company's revenue growth of -1.07% is significantly below the industry average of 3.01%. This suggests a potential struggle in generating increased sales volume.
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 assessing Analog Devices against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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Among its top 4 peers, Analog Devices has a stronger financial position with a lower debt-to-equity ratio of 0.19.
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This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively 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 facing challenges in generating profits and growing its business 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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