Analog Devices, Inc. (ADI) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Analog Devices, Inc.

Updated on October 24, 2026 · accounts published on August 19, 2026

Reading of October 23, 2026: A highly profitable chipmaker with widening margins and a solid balance sheet

Analog Devices trades at a P/E of 46.4, 50 % above its sector median, while EPS grew 39 % over the last 12 months.

• Is Analog Devices expensive or cheap? At a P/E of 46.4, Analog Devices trades 50 % above its sector median and was cheaper 76 % of the last decade.
• How is the business doing? Operating margin reached 36 % over the last 12 months, well above its 27 % average for fiscal 2014-2025.
• How strong is the balance sheet? Net debt was $10.78 per share in fiscal 2025, just 2.8 % of the share price, and the dividend has risen 11 years in a row.
• What to expect from the next earnings? Analysts expect EPS of $3.89 for the quarter due November 24, 2026, after 8 straight quarterly beats.
• Does it grow with real cash or by diluting shareholders? Free cash flow was 39 % of revenue in fiscal 2025, while stock-based pay took only 2.9 %, well below the 10 % healthy line.

Is Analog Devices expensive or cheap?

Over the last 12 months Analog Devices trades at a P/E of 46.4. That is 32 % above its ten-year median of 35.2 and 50 % above the 30.8 median of the 361 companies in its sector. Over the last decade the stock traded at a lower P/E 76 % of the time, in a range from 22.5 to 91.3. EV/EBITDA of 27.6× also sits above its five-year average of 21.8×. That is past the 110 % line the sector uses to flag an expensive multiple. The share price is up 62 % in 12 months, so the market is already paying ahead for earnings growth.

How is the business doing?

Over the last 12 months revenue grew 17 % and EPS grew 39 % year over year. The operating margin of 36 % compares with a 27 % average across fiscal 2014-2025 and 27 % in fiscal 2025 itself. The weak spot is return on capital. ROIC of 9.6 % over the last 12 months beats the 8.2 % sector median by 1.4 points, yet it topped 10 % in only one of the last ten fiscal years, with a low of 3.4 % in 2021. A net margin of 30 % and a Piotroski score of 8 out of 9 confirm that profitability is improving now.

How strong is the balance sheet?

Debt-to-equity is 0.27 over the last 12 months. Net debt was 1.2× EBITDA in fiscal 2025, within the 2.0× that semiconductor companies can tolerate. An Altman Z of 5.7 puts the company in the safe zone, and a current ratio of 1.25 covers short-term obligations. Analog Devices has raised its dividend per share for 11 consecutive fiscal years. Still, the yield is only 1.1 % over the last 12 months and the payout took 85 % of fiscal 2025 earnings, which leaves little room for bigger increases unless earnings keep growing.

What to expect from the next earnings?

Analog Devices beat EPS estimates in each of the last 8 quarters. On August 19, 2026 it reported $3.45 against $3.34 expected, a 3.3 % surprise. For the report due on November 24, 2026, analysts expect EPS of $3.89. The 2026 EPS consensus barely moved in the last 30 days, from $12.87 to $12.88 across 19 analysts, and revenue estimates held steady too. Sentiment is clearly positive: 45 of 54 analysts rate the stock a buy, 9 a hold and none a sell, so a miss would stand out against such a consistent record.

Does it grow with real cash or by diluting shareholders?

In technology, generic ratios miss what matters most: growth, pricing power and dilution from stock-based pay. Analog Devices passes on the last two. Its fiscal 2025 gross margin of 62 % beats the 45 % that marks a healthy semiconductor company. Free cash flow equalled 39 % of revenue against a 20 % bar, and stock-based compensation was 2.9 % of revenue, well under the 10 % healthy limit. It fails on growth: revenue per share fell 1.2 % a year over fiscal 2022-2025, far from the 15 % the sector treats as healthy, and ROIC of 9.6 % trails the 15 % benchmark.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.