Analog Devices (ADI): Buy, Sell, or Hold Post Q2 Earnings? Jabin Bastian Wed, October 7, 2026 at 12:08 PM EDT 3 min read ADI -3.27% ^GSPC -0.29% Trade ADI on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Since October 2021, the S&P 500 has delivered a total return of 76.6%. But one standout stock has doubled the market - over the past five years, Analog Devices has surged 152% to $421.28 per share. Its momentum hasn't stopped as it's also gained 28.7% in the last six months thanks to its solid quarterly results, beating the S&P by 11.1%.
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Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ:ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.
Examining a company's long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Analog Devices grew its sales at an impressive 16.4% compounded annual growth rate. Its growth beat the average semiconductor company and shows its offerings resonate with customers. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills.
Analog Devices has shown terrific cash profitability, and if sustainable, puts it in an advantageous position to invest in new products, return capital to investors, and consolidate the market during industry downturns. The company's free cash flow margin was among the best in the semiconductor sector, averaging an eye-popping 35.5% over the last two years.
Growth gives us insight into a company's long-term potential, but how capital-efficient was that growth? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).
Although Analog Devices has shown solid fundamentals lately, it historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 6.5%, somewhat low compared to the best semiconductor companies.
Analog Devices has huge potential even though it has some open questions, and with its shares topping the market in recent months, the stock trades at 26.3× forward P/E (or $421.28 per share). Is now a good time to buy? See for yourself in our in-depth research report, it's free.
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