Analog Devices, Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
ADI's cyclical recovery is accelerating — Q3 FY2026 revenue of $4.02B grew 39.6% YoY with EPS of $2.74, and the company has beaten EPS estimates in each of the last eight quarters — but at 47.96x trailing PE and 14.25x price-to-sales (more than double the peer median of 6.09x), the stock already discounts substantial further growth.
Margins are recovering (FY2025 gross margin 61.5% vs 57.1% in FY2024) yet remain below the FY2023 peak of 64.0%, and persistent insider selling — 275 dispositions with zero acquisitions over 24 months, net value outflow of $127.2M — tempers conviction. Hold while awaiting evidence that margins can re-approach peak levels and that the demand cycle has durability beyond the current acceleration.
What could go wrong
- Valuation compression. At 47.96x PE and 14.25x PS versus peer medians of 50.5x and 6.09x respectively, any deceleration in revenue growth could trigger a sharp de-rating, particularly given the stock's 6.9% premium to its 50-day MA ($380.12) and 11.9% premium to its 200-day MA ($362.97).
- Margin recovery stalls. FY2025 operating margin of 26.6% remains well below the FY2023 peak of 31.1%, and gross margin at 61.5% has not reclaimed the FY2023 level of 64.0%; if margin expansion plateaus, the premium multiple becomes harder to justify.
- Persistent insider selling. Over 24 months, insiders executed 275 dispositions and zero acquisitions, netting -$127.2M in value and -425,775 shares; recent October 2026 sales by the CTO and founder Ray Stata at prices above $406 continue the pattern.
- Cyclicality risk. FY2024 revenue declined 23.4% YoY and net income fell 50.7%, demonstrating ADI's sensitivity to industrial and automotive demand cycles; the current 39.6% YoY quarterly growth could normalize sharply if end-market restocking completes.
What would change my mind
Where this comes from: results, quarter to 1 Aug · earnings vs estimates, 19 Aug · peer comparison · FY23–FY25 fundamentals. Orin's read on ADI; not advice.
How has the share price moved?
Up 75.0% over twelve months, from $243.01 on 27 Oct 2025 to $425.35 at the Tue 27 Oct 2026 close. Its highest close in that time was $445.48 on 22 Jun 2026; the last close is 4.5% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 12.5M, on 26 Jun 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All ADI filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $18.6B | 0.3% |
| Vanguard Capital Management | $12.7B | 0.3% |
| State Street | $9.4B | 0.3% |
| Invesco | $6.8B | 0.5% |
| JPMorgan Chase | $6.6B | 0.4% |
| Vanguard Portfolio Management | $5.8B | 0.3% |
| Geode Capital Management | $4.9B | 0.3% |
| Bank of America | $3.6B | 0.2% |
| Morgan Stanley | $3.3B | 0.2% |
| Wells Fargo | $3.3B | 0.5% |
139 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 386 Form 4 filings; open-market trades net −$128.0M. Of the 50 on hand, 0 were open-market purchases and 38 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about ADI
Orin answers questions about ADI from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 50.2× its last 12 months of profit (Tue 27 Oct close) — higher than in 3 of its last 5 fiscal years (middle 49.6×); the typical Technology company on the NASDAQ is at 46.1×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 50.2×near usual | 49.6× | 46.1× |
| P/S | 14.8×above usual | 9.42× | — |
| EV/EBITDA | 30.3×above usual | 24.2× | — |
| P/B | 6.2×above usual | 2.3× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $480 (from $405 to $675) — 13% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$480
$405 – $675 · +13% against the last close
- 24 buy or overweight
- 3 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 50.2× its last 12 months of profit; the middle P/E of the 8 companies it is compared to that made a profit is 44.0×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| ADIAnalog Devices, Inc. | $206B | 50.2× | 30.3× | 65.8% | 29.8% | 12% |
| ALGMAllegro MicroSystems, Inc. | $6B | 420× | 62.2× | 47.2% | 1.5% | 1% |
| CRUSCirrus Logic, Inc. | $6B | 13.5× | 9.1× | 53.1% | 20.2% | 19% |
| DIODDiodes Incorporated | $3B | 27.1× | 12.1× | 33.3% | 6.5% | 6% |
| MPWRMonolithic Power Systems, Inc. | $60B | 73.9× | 56.1× | 55.2% | 24.4% | 22% |
| ONON Semiconductor Corporation | $31B | 49.8× | 20.5× | 37.4% | 10.2% | 8% |
| POWIPower Integrations, Inc. | $2B | 48.0× | 30.2× | 53.9% | 9.8% | 7% |
| SLABSilicon Laboratories Inc. | $7B | lost money | n/m | 59.9% | −4.6% | −4% |
| TXNTexas Instruments Incorporated | $282B | 40.0× | 26.6× | 60.2% | 34.3% | 41% |
| VSHVishay Intertechnology, Inc. | $3B | 31.6× | 6.4× | 22.2% | 2.4% | 4% |
- SLAB: EV/EBITDA is not meaningful (n/m) — its operating profit before depreciation over the last 12 months is so small against its price that the ratio says little.
- SLAB: lost money over the last 12 months, so no P/E.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 50.2× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now50.2×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NASDAQ were priced at a typical 46.1× their yearly profit (Tue 27 Oct close).
- Now46.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $171 a share — 59% below the $420.30 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $171 | 59% below $420.30 |
| Levered | $175 | 58% below $420.30 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.