ADI - Analog Devices: Share Appreciation Disconnected From Fundamentals

2024-05-16 17:01:51 ET

Summary

• Analog Devices' revenues have declined in all but one segment, while shares continue to climb, raising concerns.
• The company's margins, efficiency metrics, and competitive advantage have all declined.
• Analysts expect declines in most segments for Q2, with the exception of the automotive sector, which has been performing well.

Introduction

Analog Devices ( ADI ) is going to report second quarter earnings on the 22 ^nd of May before the market opens. I wanted to revisit the company to see how it performed through 2023 and what to expect in Q2. All but one segment of the business has been in a decline in the last two quarters, while shares continued to climb, which to me makes no sense. The company is still in a decline for the next quarter, while many other semiconductor companies are seeing recoveries. I'm sticking to my hold rating until I see actual improvements overall....

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