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Is Analog Devices, Inc. (ADI) Stock Trading Below Fair Value?

Friday, May 26, 2023 04:00 PM | InvestorsObserver Analysts

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Is Analog Devices, Inc. (ADI) Stock Trading Below Fair Value?

InvestorsObserver gives Analog Devices, Inc. (ADI) a strong valuation score of 74 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. ADI currently holds a better value than 74% of stocks based on these metrics. Long term investors focused on buying-and-holding should find the valuation ranking system most relevant when making investment decisions.

Valuation Rank - 74
ADI gets a 74 Valuation Rank today. Find out what this means to you and get the rest of the rankings on ADI!

Metrics Analysis

ADI has a trailing twelve month Price to Earnings (PE) ratio of 28.2 which places it above the histroical average of roughly 15. ADI is currently trading at a poor value due to investors paying more than what the stock is worth in relation to its earnings. ADI's trailing-12-month earnings per share (EPS) of 1.94 does not justify its share price in the market. Trailing PE ratios do not factor in the company's projected growth rate, thus, some firms will have high PE ratios caused by high growth recruiting more investors even if the underlying company has produced low earnings so far.
ADI has a 12 month forward PE to Growth (PEG) ratio of 1.44. Markets are overvaluing ADI in relation to its projected growth as its PEG ratio is currently above the fair market value of 1. 1.94's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.


ADI's valuation metrics are weak at its current price due to a overvalued PEG ratio despite strong growth. ADI's PE and PEG are worse than the market average resulting in a below average valuation score. Click Here to get the full Report on Analog Devices, Inc. (ADI) stock.

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