Investigating Analog Devices's Standing In Semiconductors & Semiconductor Equipment Industry Compared To Competitors
In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Analog Devices (NASDAQ:ADI) in comparison to its major competitors within the Semiconductors & Semiconductor Equipment industry. By analyzing crucial financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in 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; more than half of its chip sales are to industrial and automotive end markets. ADI's 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 | 60.80 | 4.01 | 12.50 | 2.32% | $1.47 | $1.94 | 25.91% |
| NVIDIA Corp | 45.39 | 37.49 | 24.09 | 29.14% | $38.75 | $41.85 | 62.49% |
| Broadcom Inc | 97.70 | 24.56 | 30.76 | 5.8% | $8.29 | $10.7 | 22.03% |
| Taiwan Semiconductor Manufacturing Co Ltd | 30.29 | 9.53 | 13.11 | 9.44% | $691.11 | $588.54 | 30.31% |
| Advanced Micro Devices Inc | 113.08 | 5.78 | 11.01 | 2.06% | $2.11 | $4.78 | 35.59% |
| Micron Technology Inc | 29.86 | 4.71 | 6.82 | 6.1% | $5.9 | $5.05 | 46.0% |
| Intel Corp | 675 | 1.82 | 3.34 | 3.98% | $7.85 | $5.22 | 2.78% |
| Qualcomm Inc | 34.80 | 8.81 | 4.35 | -12.88% | $3.51 | $6.24 | 10.03% |
| Texas Instruments Inc | 32.81 | 9.84 | 9.55 | 8.21% | $2.24 | $2.72 | 14.24% |
| ARM Holdings PLC | 180.12 | 20.12 | 33.94 | 3.3% | $0.22 | $1.11 | 34.48% |
| Marvell Technology Inc | 34.57 | 5.92 | 10.95 | 13.84% | $2.58 | $1.07 | 36.83% |
| NXP Semiconductors NV | 27.96 | 5.67 | 4.78 | 6.43% | $1.11 | $1.79 | -2.37% |
| Monolithic Power Systems Inc | 24.44 | 12.79 | 17.24 | 5.12% | $0.21 | $0.41 | 18.88% |
| ASE Technology Holding Co Ltd | 30.66 | 3.27 | 1.67 | 3.56% | $32.4 | $28.88 | 5.29% |
| Credo Technology Group Holding Ltd | 155.97 | 25.41 | 43.40 | 7.99% | $0.09 | $0.18 | 272.08% |
| First Solar Inc | 19.75 | 3.06 | 5.48 | 5.19% | $0.61 | $0.61 | 79.67% |
| ON Semiconductor Corp | 75.05 | 2.79 | 3.70 | 3.22% | $0.44 | $0.59 | -11.98% |
| STMicroelectronics NV | 44.24 | 1.28 | 2.02 | 1.33% | $0.31 | $1.06 | -1.97% |
| United Microelectronics Corp | 14.60 | 1.72 | 2.58 | 4.29% | $30.07 | $17.62 | -2.25% |
| Tower Semiconductor Ltd | 66.51 | 4.53 | 8.62 | 1.9% | $0.13 | $0.09 | 6.79% |
| Rambus Inc | 47.05 | 8.26 | 15.84 | 3.84% | $0.08 | $0.14 | 22.68% |
| Lattice Semiconductor Corp | 379.15 | 14.68 | 21.17 | 0.4% | $0.01 | $0.09 | 4.92% |
| Average | 102.81 | 10.1 | 13.07 | 5.35% | $39.43 | $34.23 | 32.69% |
By carefully studying Analog Devices, we can deduce the following trends:
A Price to Earnings ratio of 60.8 significantly below the industry average by 0.59x suggests undervaluation. This can make the stock appealing for those seeking growth.
With a Price to Book ratio of 4.01, significantly falling below the industry average by 0.4x, it suggests undervaluation and the possibility of untapped growth prospects.
The Price to Sales ratio is 12.5, which is 0.96x the industry average. This suggests a possible undervaluation based on sales performance.
The company has a lower Return on Equity (ROE) of 2.32%, which is 3.03% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.47 Billion, which is 0.04x below the industry average, potentially indicating lower profitability or financial challenges.
The company has lower gross profit of $1.94 Billion, which indicates 0.06x below the industry average. This potentially indicates lower revenue after accounting for production costs.
The company's revenue growth of 25.91% is significantly lower compared to the industry average of 32.69%. This indicates a potential fall in the company's sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.
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 evaluating Analog Devices alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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 0.26, which can be perceived as a positive aspect by investors.
Key Takeaways
For Analog Devices, the PE, PB, and PS ratios are all low compared to industry peers, indicating potential undervaluation. However, the low ROE, EBITDA, gross profit, and revenue growth suggest weaker financial performance relative to competitors in the Semiconductors & Semiconductor Equipment sector. This may reflect challenges in generating profits and sustaining growth for Analog Devices within the industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.