ADI
Analog Devices, Inc.
Technology · Semiconductors · United States · Stock
Score Breakdown
Scored for Aggressive Growth profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The growth sub-score of 17.5/20 is the primary driver lifting ADI to 60.8, reflecting year-over-year improvement in revenue, net income, and EPS as captured in the FY 2025 10-K filing.
- The profitability sub-score of 16.0/20 confirms that ADI's analog semiconductor business sustains high margins at the operating and net income level, providing a durable earnings base that the model rewards.
- The dividend sub-score of 13.8/20 adds meaningful points by reflecting a consistent dividend per share track record and FCF coverage of distributions, reinforcing ADI's profile as a cash-generative industrial technology business.
Why Not Higher
- The financial health sub-score of 10.0/20 is the single largest drag on the overall score, as elevated post-acquisition leverage and interest coverage metrics derived from the 10-K prevent ADI from scoring in the range achievable by peers with cleaner balance sheets.
- The theme sub-score of 0.0/20 represents up to 20 points that ADI could not access under the current model, as the SEC filing data did not map to qualifying macro themes — a structural ceiling that no amount of operational improvement can offset without theme attribution.
Data Confidence
9 / 10
Very High — full data coverage
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Analog Devices, Inc. (ADI) is a leading U.S. semiconductor company specializing in high-performance analog, mixed-signal, and digital signal processing (DSP) integrated circuits. Its products serve industrial automation, automotive, communications infrastructure, and healthcare markets, where precision signal conversion and power management are critical. ADI's technology underpins everything from factory sensors and electric vehicle battery management systems to 5G base stations and medical imaging equipment. The model assigned ADI a score of 60.8/100 for FY 2025, reflecting a company with genuine operational strengths partially offset by near-term financial headwinds. Profitability (16.0/20) and dividend (13.8/20) sub-scores are standout positives, indicating strong margin structures and consistent free cash flow generation relative to distributions. The growth sub-score (17.5/20) is the highest individual component, yet this figure must be read in context — semiconductor cycles can produce sharp year-over-year swings, and ADI has navigated inventory correction dynamics in its core industrial and communications end markets. The financial health sub-score (10.0/20) is the clearest drag, reflecting leverage on the balance sheet consistent with the significant debt load ADI carried following the 2021 Maxim Integrated acquisition. The theme sub-score of 0.0/20 indicates the model did not map ADI to qualifying macro themes from the filing data, which meaningfully caps the total score. The core research tradeoff is between ADI's demonstrated ability to generate high margins and reliable cash flows — hallmarks of a competitively entrenched analog semiconductor franchise — and the twin concerns of elevated leverage constraining financial health scores and a lack of theme attribution pulling the ceiling down. The aggressive growth profile (66.2) outperforms the safe long-term investing profile (59.4), suggesting the model sees ADI as better suited to a researcher with higher risk tolerance and a longer time horizon to absorb cyclical and leverage-related volatility.
Plain English
Analog Devices makes the specialized chips that convert real-world signals — temperature, speed, sound, light — into data that computers can process, and its products are embedded in cars, factories, hospitals, and 5G networks. The model score of 60.8 out of 100 reflects a company that is genuinely profitable and cash-generative but carries notable debt from a large acquisition and is currently working through a semiconductor industry downcycle. The High risk rating means researchers should expect meaningful earnings volatility tied to industrial and automotive inventory cycles, plus the ongoing impact of that balance sheet leverage.
Bull Case vs. Bear Case
Bull Case
- The growth sub-score of 17.5/20 is the highest individual component in the model, indicating that revenue, net income, and EPS trends in FY 2025 filings showed meaningful improvement relative to the prior year, suggesting ADI may be emerging from the semiconductor inventory correction cycle.
- A profitability sub-score of 16.0/20 reflects ADI's structurally high net and operating margins, consistent with its entrenched position in high-precision analog semiconductors where switching costs and design-in cycles create durable competitive advantages.
- The dividend sub-score of 13.8/20 indicates strong free cash flow coverage of distributions and a consistent dividend per share streak, demonstrating that management has sustained shareholder returns even during a period of cyclical revenue pressure.
Bear Case
- The financial health sub-score of 10.0/20 is the weakest non-theme component and reflects elevated leverage and constrained interest coverage on ADI's balance sheet, a direct consequence of the debt taken on to finance the Maxim Integrated acquisition.
- The theme sub-score of 0.0/20 means the model found no qualifying macro theme exposures in the SEC filing data, which prevents ADI from accessing up to 20 additional points and is a structural cap on the overall score under the current model.
- The momentum sub-score of 11.4/20 is only moderate, suggesting that while annual trends improved, the quarter-over-quarter progression in revenue, earnings, and margins within FY 2025 was not consistently accelerating — a signal worth monitoring as the cyclical recovery unfolds.
What Could Change the Picture
Bullish Triggers
- A future 10-K filing demonstrating materially reduced net debt levels and improved interest coverage ratios would lift the financial health sub-score, potentially adding several points to the overall model score and reducing the High risk rating.
- If subsequent filings show accelerating quarter-over-quarter revenue and margin expansion — lifting the momentum sub-score above 15/20 — that would signal a durable cyclical recovery in ADI's industrial and automotive end markets rather than a one-quarter bounce.
Bearish Triggers
- A reversal in the growth trajectory — such as a 10-K filing showing renewed year-over-year revenue or EPS declines driven by extended industrial inventory corrections — would erode the 17.5/20 growth sub-score that is currently the model's primary positive driver.
- Any material increase in debt load or deterioration in interest coverage metrics in future filings, whether from further acquisitions or free cash flow shortfalls, would compress the financial health sub-score further below 10.0/20 and reinforce the High risk designation.
Red Flags
- The financial health sub-score of 10.0/20 is a material concern, as it indicates leverage ratios and interest coverage metrics derived from the 10-K filing are meaningfully below the levels seen in the model's higher-scoring peers, limiting balance sheet flexibility in a prolonged downturn.
- The absence of any theme score (0.0/20) from the SEC filing data suggests the model could not substantiate exposure to macro growth themes that are often cited in investor narratives around ADI, raising questions about the degree to which filing-level disclosures support those narratives.
Risk Profile
High RiskThe High risk rating for ADI reflects the combination of a balance sheet carrying significant acquisition-related leverage — as evidenced by the 10.0/20 financial health sub-score — and ADI's exposure to semiconductor industry cyclicality, where industrial and automotive end-market inventory dynamics can produce sharp and rapid swings in revenue and earnings between annual reporting periods.
Key Catalysts to Watch
The primary catalysts to monitor are the pace at which ADI deleverages its post-Maxim balance sheet and the trajectory of its industrial and automotive end-market demand recovery, both of which will be measurable in future 10-K filings through changes in the financial health and momentum sub-scores.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.