Performance Comparison: Analog Devices And Competitors In Semiconductors & Semiconductor Equipment Industry

In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Analog Devices ADI alongside its primary competitors in the Semiconductors & Semiconductor Equipment industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to 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 24.66 2.52 7.20 2.44% $1.53 $1.96 -1.07%
NVIDIA Corp 120.64 44.86 38.08 23.79% $7.41 $9.46 101.48%
Taiwan Semiconductor Manufacturing Co Ltd 18.43 4.80 7.44 6.46% $392.33 $296.64 -10.83%
Broadcom Inc 30.20 18.34 11.57 14.98% $4.91 $6.16 4.87%
Advanced Micro Devices Inc 1083.27 3.50 8.75 0.54% $1.13 $2.75 4.22%
Qualcomm Inc 19.48 6.55 3.99 7.05% $2.06 $4.75 -24.26%
Texas Instruments Inc 19.88 8.38 7.76 10.44% $2.34 $2.81 -13.53%
ARM Holdings PLC 333.88 12.59 21.18 -2.45% $-0.12 $0.76 27.94%
Microchip Technology Inc 18.09 6.41 5.10 9.66% $1.1 $1.53 8.74%
STMicroelectronics NV 9.77 2.65 2.46 7.28% $1.69 $2.11 2.55%
GLOBALFOUNDRIES Inc 22.24 2.90 4.11 2.34% $0.64 $0.53 -10.7%
ON Semiconductor Corp 13.79 3.94 3.68 8.05% $0.87 $1.03 -0.54%
United Microelectronics Corp 8.89 1.77 2.62 4.72% $29.0 $20.46 -24.3%
ASE Technology Holding Co Ltd 15.86 1.97 0.97 3.06% $28.07 $24.92 -18.27%
First Solar Inc 35.88 2.69 5.37 4.35% $0.37 $0.38 27.37%
Skyworks Solutions Inc 15.28 2.46 3.15 4.09% $0.4 $0.48 -13.37%
Lattice Semiconductor Corp 37.82 12.67 10.83 8.96% $0.06 $0.13 1.1%
Universal Display Corp 37.91 5.60 13.24 3.77% $0.06 $0.11 -12.13%
Rambus Inc 25.55 7.53 16 10.86% $0.12 $0.08 -6.19%
MACOM Technology Solutions Holdings Inc 64.68 6.22 9.13 2.63% $0.05 $0.09 -15.59%
Allegro Microsystems Inc 21.73 4.96 5.14 6.18% $0.09 $0.16 15.92%
Average 97.66 8.04 9.03 6.84% $23.63 $18.77 2.22%

After a detailed analysis of Analog Devices, the following trends become apparent:

  • The Price to Earnings ratio of 24.66 is 0.25x lower than the industry average, indicating potential undervaluation for the stock.

  • With a Price to Book ratio of 2.52, significantly falling below the industry average by 0.31x, it suggests undervaluation and the possibility of untapped growth prospects.

  • Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 7.2, which is 0.8x the industry average.

  • With a Return on Equity (ROE) of 2.44% that is 4.4% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.

  • Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.53 Billion, which is 0.06x below the industry average, potentially indicating lower profitability or financial challenges.

  • The company has lower gross profit of $1.96 Billion, which indicates 0.1x below the industry average. This potentially indicates lower revenue after accounting for production costs.

  • The company's revenue growth of -1.07% is significantly below the industry average of 2.22%. This suggests a potential struggle in generating increased sales volume.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.

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:

  • When considering the debt-to-equity ratio, Analog Devices exhibits a stronger financial position compared to its top 4 peers.

  • This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.19, 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.

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