Analog Devices (ADI): Evaluating Valuation After Strong Earnings Beat, Upgraded Guidance and Institutional Inflows
Analog Devices (ADI) just delivered a quarter that caught the market’s eye, with revenue, earnings and guidance all stepping up together, and big money investors leaning in rather than fading the strength.
See our latest analysis for Analog Devices.
The earnings beat, confident first quarter 2026 guidance, ongoing buybacks and a steady dividend have all fed into a powerful move. The roughly 23% 1 month share price return and a 5 year total shareholder return above 100% signal that momentum is still building rather than fading.
If ADI’s run has you thinking about what else might be setting up for strong multi year returns, this is a good moment to explore high growth tech and AI stocks.
With shares sitting around analyst targets after a powerful run, investors now face a key question: is Analog Devices still trading below its true potential, or is the market already baking in years of future growth?
Most Popular Narrative: 30% Overvalued
With Analog Devices last closing at $281.29 against a narrative fair value of about $280.31, the story hinges on aggressive long term growth assumptions.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $14.3 billion, earnings will come to $4.9 billion, and it would be trading on a PE ratio of 34.6x, assuming you use a discount rate of 10.3%.
Want to see the full playbook behind that rich multiple, steep earnings ramp and upgraded growth outlook? Curious what holds this valuation together? Dig in.
Result: Fair Value of $280.31 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, rising competition and geopolitical or trade tensions could quickly pressure margins and demand, forcing investors to rethink those upbeat long term assumptions.
Find out about the key risks to this Analog Devices narrative.
Build Your Own Analog Devices Narrative
If you want to challenge this view or dig into the numbers yourself, you can quickly craft a personalized take in under three minutes: Do it your way.
A great starting point for your Analog Devices research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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