Analog Devices
Tollbooth at the Intelligent Edge, Built to Endure Cycles
Analog Devices is a top-tier analog and mixed-signal semiconductor franchise with durable moats from switching costs and intangible assets, reinforced by scale and a diversified end-market mix led by industrial and automotive.
Despite a cyclical downturn in fiscal 2024, trailing-twelve-month free cash flow rebounded to about 35 percent of revenue and $3.68 billion by the July-ended quarter, while management continued returning significant cash through dividends and repurchases.
The balance sheet carries manageable net leverage with long-dated maturities, and internal manufacturing investments are expanding resilient capacity. Our assessment: ADI is a high-quality compounder through cycles, though not immune to macro and inventory swings.
Using TTM data and a simple free-cash-flow multiple framework, we estimate a fair value around $170 per share at 23x TTM FCF per share of roughly $7.40. Given a 10-year U.S.
Treasury yield near 4.1 percent, we would prefer a 20x FCF entry point for a stronger spread and margin of safety, while acknowledging upside if FCF normalizes above current TTM as the recovery progresses.
Analog Devices a-t-elle un rempart concurrentiel (moat) solide ?
ADI’s moat rests on high switching costs from design-in sockets that often persist 7 to 15 years, plus intangible assets in proprietary analog IP, applications expertise, and trusted quality.
The firm holds leading share in converters and a deep catalog across precision, power, RF, and mixed-signal, serving >100k customers through both distribution and direct channels. Its resilient, hybrid internal/external manufacturing network and ongoing capacity investments further entrench customer reliance by improving delivery assurance.
Risks to moat durability include Texas Instruments’ cost-scale push, accelerating Chinese analog entrants, and regulatory/trade frictions. Overall, we judge the moat as strong and durable, with multiple reinforcing elements.
Analog Devices a-t-elle un pricing power dans son secteur ?
ADI consistently posts top-tier margins for semis: in fiscal Q3 2025 GAAP gross margin was 62 percent and adjusted gross margin ~69 percent; adjusted operating margin ~42 percent. TTM free cash flow margin was ~35 percent.
These indicate meaningful ability to price for value, especially in proprietary, high-performance products and safety-critical automotive/industrial sockets. While cycles and mix can pressure margins temporarily, the trajectory exiting the 2024 downturn shows renewed leverage as volumes return.).
Quelle est la prévisibilité de l'activité de Analog Devices ?
Revenue is diversified across industrial (45 percent), automotive (30 percent), communications (13 percent), and consumer (13 percent) as of the latest quarter, with significant recurring characteristics from long product lifecycles and sticky sockets.
That said, analog semis remain cyclical with inventory corrections and macro sensitivity, evidenced by a 23 percent revenue decline in FY2024 before a recovery in FY2025. Geographic mix includes roughly 23 percent from China in FY2024, implying moderate exposure to policy/trade swings.
ADI’s TTM bookings and backlog trends point to an upswing into FY2025, improving near-term visibility.
Analog Devices est-elle financièrement solide ?
As of August 2, 2025, ADI reported cash and short-term investments of roughly $3.47B versus total debt of about $8.69B (including commercial paper), with a long-dated notes ladder extending to 2054. TTM operating cash flow of ~$4.16B and FCF of ~$3.68B provide strong coverage, with net debt around 1.4x TTM FCF.
The company repaid the 2025 maturity and faces manageable near-term maturities (e.g., 2026 and 2027 notes). Liquidity and cash generation comfortably support dividends, buybacks, and capex through cycles.
Quelle est l'efficacité de la stratégie d'allocation de capital de Analog Devices ?
Management has long targeted returning essentially all FCF to shareholders over time while reinvesting heavily in R&D and capacity. In the TTM through Q3 FY2025, ADI returned $3.47B (dividends ~$1.89B, repurchases ~$1.58B). The quarterly dividend stands at $0.99 per share.
The Maxim acquisition (closed 2021) delivered targeted cost synergies ($275M) and broader portfolio depth; integration has been absorbed while FCF remained robust. We monitor repurchase timing versus intrinsic value and stock-based compensation (SBC was $235M in the first nine months of FY2025), which is acceptable relative to FCF.
Capex has been elevated but focused on resilient internal capacity expansions, which we view as moat-accretive.).
Analog Devices a-t-elle une direction de haute qualité ?
CEO and Chair Vincent Roche is a long-tenured operator with a track record across multiple cycles and large integrations (Linear, Maxim).
Governance appears conventional with a largely independent board and strong cash return discipline. 2025 proxy materials show continued shareholder engagement and approval of say-on-pay, and filings indicate CEO equity alignment through shares and performance options.
We note some mixed engineer sentiment on public forums regarding technical support responsiveness for certain product lines, an execution area to keep watching post-Maxim.
Analog Devices est-elle une entreprise de qualité ?
Analog Devices est une entreprise de qualité a good avec un score de qualité de 86/100
- Powerful moats from design-in switching costs and proprietary analog IP; category leadership in data converters and broad catalog breadth deepen customer lock-in over long product lifecycles.
- FCF engine back to form: TTM operating cash flow $4.16B and FCF ~$3.68B (35 percent margin) with broad-based demand recovery across all end markets in FY25 to date.)
- Conservative balance sheet and long-dated debt ladder; net debt roughly 1.4x TTM FCF with ample liquidity.
- Resilient hybrid manufacturing with active capacity expansions in the U.S. and Europe should enhance control and flexibility versus purely outsourced models.
- Capital return discipline continues (dividend and buybacks), but we watch dilution/SBC and prefer repurchases when below fair value; we also monitor customer support perceptions post-Maxim integration.
Quelle est le prix juste de l'action Analog Devices ?
Analog Devices est-elle un bon investissement à $295 ?
L'analyse suivante est fournie à des fins d'information et d'éducation uniquement. Elle ne constitue pas un conseil financier, un conseil en investissement ou une recommandation d'achat ou de vente de titres. Les opinions exprimées sont basées sur des informations publiques et des données historiques. Beanvest et ses contributeurs peuvent détenir des positions dans les titres mentionnés. Les investisseurs doivent effectuer leur propre diligence raisonnable ou consulter un conseiller financier agréé avant de prendre toute décision d'investissement.