Analog Devices, Inc. (NASDAQ:ADI) turned in some strong numbers with its latest results. The company beat forecasts, with revenue of US$2.2b, some 2.5% above estimates, and statutory earnings per share (EPS) coming in at US$0.61, 36% ahead of expectations.

Shares of Analog Devices inched 0.73% higher to $237.41 Thursday, on what proved to be an all-around mixed trading session for the stock market, with the Dow Jones Industrial Average rising 0.20% to 38,886.17 and the S&P 500 Index falling 0.02% to 5,352.96.

This set the scene for Weekly Options USA Members to profit by 82% using an ADI Weekly Options trade!

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Sunday, June 09, 2024

by Ian Harvey

UPDATE

Analog Devices, Inc. (NASDAQ:ADI) is headquartered in Norwood, Massachusetts. The company is an original equipment manufacturer of semiconductor devices, specifically, analog, mixed signal and digital signal processing (DSP) integrated circuits.

Shares of Analog Devices inched 0.73% higher to $237.41 Thursday, on what proved to be an all-around mixed trading session for the stock market, with the Dow Jones Industrial Average rising 0.20% to 38,886.17 and the S&P 500 Index falling 0.02% to 5,352.96.

This was the stock's second consecutive day of gains.

Analog Devices closed $4.47 short of its 52-week high ($241.88), which the company reached on May 23rd.

Also, the stock outperformed some of its competitors Thursday.

Earnings and sales are forecasted to increase 1.8% and 1.1% year-over-year, respectively.

Eight analysts revised their earnings estimate higher in the last 60 days for fiscal 2023, while the Consensus Estimate has increased $0.28 to $9.74 per share. ADI also boasts an average earnings surprise of 7.8%.

Analog Devices is also cash rich. The company has generated cash flow growth of 26.7%, and is expected to report cash flow expansion of 99% in 2023.

Analog Devices is up 22.7% since the beginning of the year. Investors who bought $1,000 worth of Analog Devices's shares 5 years ago would now be looking at an investment worth $2,342.

The ADI Weekly Options Potential Profit Explained.....

** OPTION TRADE: Buy ADI JUN 28 2024 235.000 CALLS - price at last close was $4.55 - adjust accordingly.

Obviously the results will vary from trader to trader depending on entry cost and exit price that was undertaken.

Entered the ADI Weekly Options (CALL) Trade on Wednesday, May 29, 2024 for $3.80.

Sold half the ADI Weekly options contracts on Thursday, June 06, 2024 for $6.90; a potential profit of82%.

(This result will vary for members depending on their entry and exit strategies).

Holding remaining contracts for further profit!

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Why the ADI Weekly Options Trade was Originally Executed!

Analog Devices, Inc. (NASDAQ:ADI) turned in some strong numbers with its latest results. The company beat forecasts, with revenue of US$2.2b, some 2.5% above estimates, and statutory earnings per share (EPS) coming in at US$0.61, 36% ahead of expectations.

Taking into account the latest results, the 28 analysts covering Analog Devices provided consensus estimates of US$9.34b revenue in 2024, which would reflect a considerable 11% decline over the past 12 months. Statutory earnings per share are forecast to plunge 25% to US$3.24 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$9.17b and earnings per share (EPS) of US$2.71 in 2024.

Although the revenue estimates have not really changed, we can see there's been a substantial gain in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

About Analog Devices …..

Analog Devices, Inc. designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems products in the United States, rest of North and South America, Europe, Japan, China, and rest of Asia.

The company provides data converter products, which translate real-world analog signals into digital data, as well as translates digital data into analog signals; power management and reference products for power conversion, driver monitoring, sequencing, and energy management applications in the automotive, communications, industrial, and consumer markets; and power ICs that include performance, integration, and software design simulation tools for accurate power supply designs.

It also offers amplifiers to condition analog signals; and radio frequency and microwave ICs to support cellular infrastructure; and micro-electro-mechanical systems technology solutions, including accelerometers used to sense acceleration, gyroscopes for sense rotation, inertial measurement units to sense multiple degrees of freedom, and broadband switches for radio and instrument systems, as well as isolators.

In addition, the company provides digital signal processing and system products for numeric calculations. It serves clients in the industrial, automotive, consumer, instrumentation, aerospace, defense and healthcare, and communications markets through a direct sales force, third-party distributors, and independent sales representatives, as well as online.

Analog Devices, Inc. was incorporated in 1965 and is headquartered in Wilmington, Massachusetts.

Further Catalysts for the ADI Weekly Options Trade…..

The company's results over the past year have been mediocre. The new high represents investor sentiment that Analog Devices stock will continue rising as its sales into the rapidly growing AI market rise.

Analog Devices makes analog and mixed-signal chips for a variety of markets. Those are the chips that accompany microprocessors — the "brains" of computers and consumer electronics. They do tasks like regulating power levels, sound and so forth. Analysts project that sales of those chips will rise as the artificial intelligence boom continues to roll out.

The Wilmington, Mass.-based company earned an adjusted $1.40 a share on sales of $2.16 billion in the quarter ended May 4. Analysts had expected earnings of $1.26 a share on sales of $2.11 billion. Both earnings and revenue were below the year-ago figures but investors are overlooking that as Analog Devices stock appears to have turned the corner toward stronger results.

Analysts.....

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 15% to US$248.

The consensus earnings per share upgrade suggests a clear improvement in sentiment around Analog Devices' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

According to the research reports of 24 Wall Street equities research analysts, the average twelve-month stock price forecast for Analog Devices is $243.23, with a high forecast of $285.00 and a low forecast of $175.00. The consensus rating for Analog Devices stock is Moderate Buy based on the current 6 hold ratings and 18 buy ratings for ADI.

Summary.....

Analog Devices stock opened at $233.44 on Wednesday. The company has a debt-to-equity ratio of 0.19, a current ratio of 1.58 and a quick ratio of 1.13. Analog Devices, Inc. has a 1-year low of $154.99 and a 1-year high of $241.88. The company has a market cap of $115.84 billion, a PE ratio of 54.54, and a price-to-earnings-growth ratio of 3.97 and a beta of 1.14. The stock’s 50 day moving average price is $202.35 and its 200 day moving average price is $194.73.

Therefore…..

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