Analog Devices engages in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits (ICs) for use in industrial, automotive, consumer, and communication markets worldwide. The company was founded in 1965 and is based in Norwood, Massachusetts.
ADI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for ADI, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Analog Devices Inc ranked in the 39th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for Analog Devices Inc ended up being:
ADI's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 34.86% of tickers in our DCF set.
The weighted average cost of capital for the company is 8. This value is greater than only 23.47% stocks in the Technology sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
ALRM, ACN, DIOD, CDK, and CTS can be thought of as valuation peers to ADI, in the sense that they are in the Technology sector and have a similar price forecast based on DCF valuation.
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MarketGyrations on Seeking Alpha | September 29, 2020
Under the strategic collaboration, Analog Devices (ADI) and Microsoft will mass produce 3D imaging products and solutions leveraging MSFT's 3D time-of-flight sensor technology.ADI is creating and selling a new product series of 3D ToF imagers, laser drivers, software, and hardware-based depth systems. The products are already being sample tested and the first...