Related questions this article answers
- Is Analog Devices stock overvalued right now?
- Is ADI undervalued?
- Should I buy Analog Devices stock?
- Is now a good time to buy ADI?
- What is Analog Devices's fair value?
- Is ADI a good long term investment?
The short answer
Short answer: Analog Devices looks overvalued at current levels. Compared with the recent share price of $408.52, the current DCF output near $207.73 suggests Analog Devices is about 96.7% overvalued on these cash flow assumptions. Analog Devices is being valued in the context of a business with gross margin near 62.8%, which helps show what kind of operating model investors are paying for. The fair answer depends on whether the business can keep converting its current position into enough earnings, growth, and cash flow to justify the market price.
Why valuing this kind of technology company is more complex than it looks
Analog Devices operates in Semiconductors. Companies in this part of the market are usually valued on a mix of current earnings, expected growth, margin durability, and cash generation.
The reason this matters is simple. Two companies can show similar headline multiples and still deserve very different valuations because their margins, cash conversion, and growth durability are not the same.
The 5 key metrics applied to Analog Devices
A single ratio rarely tells the whole story. This framework starts with trailing P/E, forward P/E, PEG, EV/EBITDA, and price to sales, then keeps only the metrics that are present and usable for this company.
Trailing P/E
Trailing P/E compares the current share price with the last twelve months of earnings. For Analog, the current reading is 89.0x. Shows what the market is paying for Analog's recent earnings.
PEG ratio
PEG compares the earnings multiple with expected growth. For Analog, the current reading is 1.0x. Helps show whether the earnings multiple is being offset by expected growth.
EV/EBITDA
EV/EBITDA compares enterprise value with operating profit before depreciation and amortization. For Analog, the current reading is 22.1x. Adds a capital structure aware check on operating valuation.
Price to sales
Price to sales compares market value with revenue. For Analog, the current reading is 17.0x. Useful when revenue mix, margins, or future scaling matter as much as near term earnings.
Free cash flow yield
Free cash flow yield compares free cash flow with market value. For Analog, the current reading is 2.3%. Shows how much cash Analog is generating relative to its market value.
| Metric | Current value | What it suggests |
|---|---|---|
| Trailing P/E | 89.0x | Shows what the market is paying for Analog's recent earnings. |
| PEG ratio | 1.0x | Helps show whether the earnings multiple is being offset by expected growth. |
| EV/EBITDA | 22.1x | Adds a capital structure aware check on operating valuation. |
| Price to sales | 17.0x | Useful when revenue mix, margins, or future scaling matter as much as near term earnings. |
| Free cash flow yield | 2.3% | Shows how much cash Analog is generating relative to its market value. |
| Gross margin | 62.8% | Shows how much of Analog's revenue remains after direct costs. |
| Revenue growth | 16.9% | Shows whether Analog's top line is still expanding. |
The table is a snapshot of the current setup. It is meant to frame the valuation question, not replace the company specific analysis below.
Analog Devices's valuation breakdown
As of Q2 2026, Analog Devices traded near $408.52 with a market value near $199.44B.
| Metric | Current value | What it suggests |
|---|---|---|
| Trailing P/E | 89.0x | Shows what the market is paying for Analog's recent earnings. |
| PEG ratio | 1.0x | Helps show whether the earnings multiple is being offset by expected growth. |
| EV/EBITDA | 22.1x | Adds a capital structure aware check on operating valuation. |
| Price to sales | 17.0x | Useful when revenue mix, margins, or future scaling matter as much as near term earnings. |
| Free cash flow yield | 2.3% | Shows how much cash Analog is generating relative to its market value. |
| Gross margin | 62.8% | Shows how much of Analog's revenue remains after direct costs. |
| Revenue growth | 16.9% | Shows whether Analog's top line is still expanding. |
Metrics move with the market and with each earnings update. If a field is missing or stale, it is intentionally left out here rather than guessed.
What the numbers tell us
For Analog, the current valuation is leaning heavily on growth and revenue quality. Revenue growth is around 16.9% and investors are paying about 17.0x of sales.
- Analog's PEG ratio near 1.0x matters because it tests whether the earnings multiple is being balanced by a credible growth rate.
- Analog's price to sales multiple near 17.0x needs to be read beside revenue growth near 16.9%, because rich revenue multiples only hold up when growth quality stays intact.
- Analog's gross margin near 62.8% helps explain whether the market is dealing with a commodity style business or a business with stronger pricing power and business mix.
What would make Analog Devices look cheaper or more expensive?
What would make it look cheaper
- Analog would look cheaper if the business kept growing while valuation multiples moved lower.
- Analog would also look more attractive if cash generation improved without the market price rising at the same pace.
What would make it look expensive
- Analog would look expensive if earnings or revenue expectations softened while the current multiple stayed elevated.
- Analog would also look expensive if margins weakened but the stock kept the same quality premium.
Technology valuation context
Analog Devices operates in Semiconductors. Companies in this part of the market are usually valued on a mix of current earnings, expected growth, margin durability, and cash generation.
The verdict
Analog Devices looks close to a market level that already reflects much of the current business strength. Future upside is more likely to come from better fundamentals than from simple multiple expansion.
This is analysis of publicly available market data. It is not financial advice, and it should be read in the context of personal goals, risk tolerance, and time horizon.
Want to run the numbers yourself?
Use TopTier Strategy research tools to review ADI's live valuation profile, stock page, and related company analysis.
Frequently asked questions
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Data source: TopTier Strategy research platform - toptierstrategy.com/research. Data as of 2026-05-08T00:26:53.233556.