Value
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.6 |
| P/S | 0.6 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.1 |
| PEG | 9.3 |
| Analyst target | 6.0 |
- ▸Forward P/E: 24.6x
- ▸PEG: 0.62
ADI · Why this verdict
Why Analog Devices (ADI) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictBUY WAIT
Overall score6.3/10
ConfidenceMEDIUM
MacroRISK_OFF
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue and earnings are growing strongly, with 40% YoY growth, both growth components at 10 out of 10 and a Rule of 40 score of 69. Growth breakdown | Revenue growth stays above 20% YoY over the next 12 months. | →Stable |
| CounterSemiconductor demand is cyclical, and 40% growth likely reflects a recovery from a low base that will fade. | ||
Analog Devices earns 30% margins with a wide economic moat and a Piotroski F-Score of 8/9. Quality breakdown | Margins stay above 27% and the Piotroski F-Score stays at or above 7/9. | →Stable |
| CounterROE scores only 4.1 out of 10, so margins are not yet translating into outsized returns on equity. | ||
Third-party distributors account for 56.0% of customers and the company relies on TSMC and other wafer foundries, with 2 HIGH concentration risks flagged. Bear case | Distributor share stays below 60% and supply remains uninterrupted. | ↓Deteriorating |
| CounterA distributor inventory correction or a foundry disruption would hit shipments directly, and the 1.57 put/call ratio shows traders hedging this risk. | ||
Momentum scores 7.9 out of 10, with rising on-balance volume, a price above the 200-day average and a breakout above resistance after a golden cross. Momentum breakdown | The price holds above the 200-day average and above the breakout level. | ↓Deteriorating |
| CounterA 2.1x volume surge on a selloff suggests heavy selling pressure, and breakouts that stall at a 4% gap to the target can reverse. | ||
The price of $417.11 is 4.2% below the $434.64 analyst target, against 8.4% downside to the stop, a reward-to-risk of 0.5, with a forward P/E of 25.3x. Targets | Earnings growth justifies the multiple, with PEG staying below 0.8. | ↑Improving |
| CounterThe upside is smaller than the downside, so any growth slowdown could compress the multiple quickly. | ||
Revenue and earnings are growing strongly, with 40% YoY growth, both growth components at 10 out of 10 and a Rule of 40 score of 69.
→StableGrowth breakdown
- Expectation
- Revenue growth stays above 20% YoY over the next 12 months.
CounterSemiconductor demand is cyclical, and 40% growth likely reflects a recovery from a low base that will fade.
Analog Devices earns 30% margins with a wide economic moat and a Piotroski F-Score of 8/9.
→StableQuality breakdown
- Expectation
- Margins stay above 27% and the Piotroski F-Score stays at or above 7/9.
CounterROE scores only 4.1 out of 10, so margins are not yet translating into outsized returns on equity.
Third-party distributors account for 56.0% of customers and the company relies on TSMC and other wafer foundries, with 2 HIGH concentration risks flagged.
↓DeterioratingBear case
- Expectation
- Distributor share stays below 60% and supply remains uninterrupted.
CounterA distributor inventory correction or a foundry disruption would hit shipments directly, and the 1.57 put/call ratio shows traders hedging this risk.
Momentum scores 7.9 out of 10, with rising on-balance volume, a price above the 200-day average and a breakout above resistance after a golden cross.
↓DeterioratingMomentum breakdown
- Expectation
- The price holds above the 200-day average and above the breakout level.
CounterA 2.1x volume surge on a selloff suggests heavy selling pressure, and breakouts that stall at a 4% gap to the target can reverse.
The price of $417.11 is 4.2% below the $434.64 analyst target, against 8.4% downside to the stop, a reward-to-risk of 0.5, with a forward P/E of 25.3x.
↑ImprovingTargets
- Expectation
- Earnings growth justifies the multiple, with PEG staying below 0.8.
CounterThe upside is smaller than the downside, so any growth slowdown could compress the multiple quickly.
Per-dimension breakdown
Quality
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.1 |
| ROA | 4.3 |
| Gross margin | 9.2 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 4.8 |
| FCF quality | 7.0 |
| Moat | 8.4 |
| Rule of 40 | 9.5 |
| Piotroski F | 8.9 |
- ▸Strong margins: 30%
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
- ▸Rule of 40: 69 (elite)
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 40% YoY
Momentum
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 1.9 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 9.0 |
| Price target | 8.1 |
- ▸Analyst upside: 24%
Insider
4.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.7 |
| notable moves | 3.0 |
- ▸Insider selling (low materiality) — $21,197,191 (0.011% of mkt cap)
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.7 |
| quality rank | 6.6 |
| growth rank | 6.0 |
Technical
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.8 |
| support resistance | 9.0 |
| 52w position | 7.1 |
| gap | 7.0 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.8 |
| days to cover | 7.6 |
| volatility | 0.1 |
| put call | 8.8 |
| implied vol | 1.5 |
| max pain risk | 3.0 |
| beta | 6.0 |
| debt equity | 8.9 |
- ▸High IV: 71%
- ▸Above max pain $230
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.8 |
| dividend safety | 5.8 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/0M
How the verdict was assembled
Engine trigger
Growth is cheap relative to earnings, but the technical setup has not yet produced a breakout above resistance (PEG 0.62, quality 7.6/10, growth 10.0/10).
Engine technical detail
verdict_path:
L4:PATH_C2_GARP_WAIT|ENTRY_STICKY:WITHIN_BANDPassed (4)
- INSIDER:OK
- EARNINGS_PROXIMITY:19d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.5<4.5
- ASYMMETRY:1.4<1.5@spot
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.45
Upside
+14.4%
Downside
9.9%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeTemporary headwind — High quality (7.6) with weak momentum (2.5)
SuitabilityModerate — Balanced profile
Investment implication
The C-path quality+growth combination triggered the STRONG_BUY_WAIT verdict: quality 7.6 and growth 10.0 both clear their thresholds, with asymmetric R:R of 1.45 supporting the read.
The strongest dimensions are Growth at 10.0, Technical at 8.2, and Sentiment at 7.9; the weakest are Momentum at 2.5, Insider at 4.2, and Value at 4.5. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 1.45 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Explosive Growth Elite Rule Of 40
Trip ifRevenue growth falls below 15% YoY from the current 40%.
- P2Wide Moat High Margins
Trip ifNet margin falls below 22% from the current 30%.
- P3Breakout Momentum Confirmed
Trip ifPrice drops below the 200-day moving average.
- P4Thin Upside And Premium Multiple
Trip ifPrice falls to $370.54 or below, from the current $417.11.
- P5Distributor And Foundry Concentration
Trip ifThird-party distributors exceed 65% of customers from the current 56.0%.