Analog Devices, Inc. (ADI): investment thesis checklist
What a value investor writing down why they own Analog Devices, Inc. would be relying on, read from its filings: the figures that have carried the business, the lines a reader might set on them, and the published tests it meets today. A list to write against, not a view on the company.
1. The figures the case would rest on
- Return on invested capital: 6.1% in FY2025; between 4.5% and 8.4% over 4 filed years, median 6.5%. Does the thesis need it to stay inside that range?
- Return on equity: 6.7% in FY2025; between 3.7% and 16.7% over 10 filed years, median 8.6%. Does the thesis need it to stay inside that range?
- Free cash flow yield: 3.7% in FY2025; between 2.8% and 6.7% over 10 filed years, median 4.3%. Does the thesis need it to stay inside that range?
- EV to EBIT: 41.86x in FY2025; between 22.93x and 58.45x over 5 filed years, median 41.86x. Does the thesis need it to stay inside that range?
- Price to earnings: 51.34x in FY2025; between 21.80x and 68.74x over 10 filed years, median 33.05x. Does the thesis need it to stay inside that range?
- Gross margin: 61.5% in FY2025; between 57.1% and 68.5% over 10 filed years, median 63.4%. Does the thesis need it to stay inside that range?
- Operating margin: 26.6% in FY2025; between 21.6% and 31.1% over 10 filed years, median 27.0%. Does the thesis need it to stay inside that range?
- Net debt to EBITDA: 1.93x in FY2025; between 1.54x and 2.94x over 5 filed years, median 1.93x. Does the thesis need it to stay inside that range?
- Revenue growth, 5-year CAGR: 14.5% in FY2025; between 2.7% and 18.7% over 10 filed years, median 14.6%. Does the thesis need it to stay inside that range?
- Share count change: -0.4% in FY2025; between -3.3% and 30.4% over 10 filed years, median -0.3%. Does the thesis need it to stay inside that range?
2. What must stay true: guardrails a reader might set
Each line is drafted from Analog Devices, Inc.'s own current figure, never from a level we think a business should clear, and replayed over its filed years. They are a reader's to keep, edit or drop.
Debt to Equity stays at or below 0.33x
Today 0.26x. Replayed over 5 filed years, it held in every one.
Return on Invested Capital stays at or above 4.87%
Today 6.09%. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
Dividend Rate stays at or above $4.35
Today $4.40. This indicator depends on inputs (market price, multi-statement composites) whose history is not deep enough to re-derive it with the same formula as the live value, so no honest retro-test exists for it.
3. What would break it
- A filed year in which debt to equity rose above 0.33x.
- A filed year in which return on invested capital fell below 4.87%.
- A filed year in which dividend rate fell below $4.35.
4. The published tests it meets today
Of 30 tests value investors published: 3 met, 27 not met, 0 we could not complete. Counts, never a score.
Meets: Three forensic scores; Z-score and coverage (Edward Altman); Cash-covered dividend.
What this cannot tell you
What the numbers say today, not the day one stops being true. The reasons are not written down.
An account adds
One email the night a number you wrote down breaks. Silence otherwise.
No card. 30 free days, and nothing is charged unless you choose a plan.
How this is computedA computation on accounts filed with the SEC, not a recommendation and not advice. Past filings do not indicate future results. Risk disclaimer.