Analog Devices Profitability Analysis
| ADI Stock | USD 218.06 0.03 0.01% |
Net Income | First Reported 1989-04-30 | Previous Quarter 392.2 M | Current Value 478.1 M | Quarterly Volatility 196.1 M |
| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
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| Gross Profit Margin | 0.66 | 0.5708 |
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| Net Profit Margin | 0.22 | 0.1735 |
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| Operating Profit Margin | 0.27 | 0.2156 |
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| Pretax Profit Margin | 0.23 | 0.1885 |
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| Return On Assets | 0.0569 | 0.0339 |
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| Return On Equity | 0.1 | 0.0465 |
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For Analog Devices profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Analog Devices to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Analog Devices utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Analog Devices's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Analog Devices over time as well as its relative position and ranking within its peers.
Analog |
Analog Devices' Revenue Breakdown by Earning Segment
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Is Semiconductors & Semiconductor Equipment space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Analog Devices. If investors know Analog will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Analog Devices listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.55) | Earnings Share 3.27 | Revenue Per Share 19.544 | Quarterly Revenue Growth (0.25) | Return On Assets 0.0286 |
The market value of Analog Devices is measured differently than its book value, which is the value of Analog that is recorded on the company's balance sheet. Investors also form their own opinion of Analog Devices' value that differs from its market value or its book value, called intrinsic value, which is Analog Devices' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Analog Devices' market value can be influenced by many factors that don't directly affect Analog Devices' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Analog Devices' value and its price as these two are different measures arrived at by different means. Investors typically determine if Analog Devices is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Analog Devices' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
Analog Devices Return On Asset vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Analog Devices's current stock value. Our valuation model uses many indicators to compare Analog Devices value to that of its competitors to determine the firm's financial worth. Analog Devices is rated below average in return on equity category among its peers. It is rated below average in return on asset category among its peers reporting about 0.61 of Return On Asset per Return On Equity. The ratio of Return On Equity to Return On Asset for Analog Devices is roughly 1.63 . As of now, Analog Devices' Return On Equity is decreasing as compared to previous years. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Analog Devices' earnings, one of the primary drivers of an investment's value.Analog Devices' Earnings Breakdown by Geography
Analog Return On Asset vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Analog Devices |
| = | 0.0466 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.
Analog Devices |
| = | 0.0286 |
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.
Analog Return On Asset Comparison
Analog Devices is currently under evaluation in return on asset category among its peers.
Analog Devices Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Analog Devices, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Analog Devices will eventually generate negative long term returns. The profitability progress is the general direction of Analog Devices' change in net profit over the period of time. It can combine multiple indicators of Analog Devices, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
| Last Reported | Projected for Next Year | ||
| Accumulated Other Comprehensive Income | -185.3 M | -176 M | |
| Operating Income | 2 B | 2.1 B | |
| Income Before Tax | 1.8 B | 1.9 B | |
| Total Other Income Expense Net | -255.5 M | -242.7 M | |
| Net Income | 3.8 B | 4 B | |
| Income Tax Expense | 142.1 M | 105.7 M | |
| Net Income Applicable To Common Shares | 3.8 B | 4 B | |
| Net Income From Continuing Ops | 3.8 B | 4 B | |
| Non Operating Income Net Other | 18.4 M | 19.3 M | |
| Interest Income | 37.2 M | 39 M | |
| Net Interest Income | -201 M | -211.1 M | |
| Change To Netincome | -166.1 M | -157.8 M | |
| Net Income Per Share | 3.30 | 3.31 | |
| Income Quality | 1.65 | 1.72 | |
| Net Income Per E B T | 0.92 | 0.93 |
Analog Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Analog Devices. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Analog Devices position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Analog Devices' important profitability drivers and their relationship over time.
Analog Devices Profitability Trends
Analog Devices profitability trend refers to the progression of profit or loss within a business. An upward trend means that Analog Devices' profit has generally increased over time, and a downward profitability trend means profits are declining. Recognizing problems early in profitability trends allows investors to address revenue and cost issues in advance. Investors and analysts usually monitor three types of profitability trends: gross, operating, and net. Gross profit is the difference between revenue and costs of goods sold. Operating profit is Analog Devices' gross profit minus its overhead. After you account for other unusual revenue, expenses, and costs, you get net profit. Gross profit trends are often a good indicator of future profitability. If you have high gross profit margins, you have a better chance to cover overhead and make money.
Analog Devices Profitability Drivers Correlations
One of the toughest challenges investors face today is learning how to quickly synthesize and read into endless financial statements and information provided by the company, SEC reporting, and various external parties. Understanding the correlation between Analog Devices different financial indicators related to revenue and profit generation helps investors identify and prioritize their investing strategies towards Analog Devices in a much-optimized way. Analyzing correlations between profit drivers that are directly associated with dollar figures is the most effective way to break down Analog Devices' future profitability.
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Use Analog Devices in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Analog Devices position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Analog Devices will appreciate offsetting losses from the drop in the long position's value.Analog Devices Pair Trading
Analog Devices Pair Trading Analysis
The ability to find closely correlated positions to Analog Devices could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Analog Devices when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Analog Devices - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Analog Devices to buy it.
The correlation of Analog Devices is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Analog Devices moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Analog Devices moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Analog Devices can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Analog Devices position
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To fully project Analog Devices' future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Analog Devices at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Analog Devices' income statement, its balance sheet, and the statement of cash flows.