Analog Devices, Inc. (ADI) DCF Valuation
Transparent DCF models put Analog Devices, Inc. (ADI)'s fair value in a range of $111.46 – $197.66 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $404.62 sits above that range — by these conservative assumptions it looks richly valued; the reverse-DCF below is the better lens for a high-growth name.
Reverse DCF: at today's $404.62, the market is pricing in roughly +21.6%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of +15.5%. The price is betting on acceleration above its track record.
Current Price
$404.62
Fair-Value Range
$111.46 – $197.66
Market-Implied Growth
+21.6%/yr
vs +15.5% 5Y actual
ADI DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $3.7B · 0.49B shares · net debt $6.1B
Estimated Fair Value
$111.46
-72.5% vs $404.62
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $404.62; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $142 | $149 | $159 | $170 | $184 |
| 9.0% | $120 | $125 | $131 | $139 | $147 |
| 10.0% | $103 | $107 | $111 | $116 | $122 |
| 11.0% | $90.26 | $93.07 | $96.22 | $99.76 | $104 |
| 12.0% | $79.77 | $81.88 | $84.22 | $86.82 | $89.72 |
About Analog Devices, Inc.
Analog Devices, Inc. (ADI) is a technology leader specializing in the conception, production, validation, and global marketing of integrated circuits (ICs), software solutions, and advanced subsystems. Their offerings leverage sophisticated analog, mixed-signal, and digital signal processing technologies. The company's comprehensive product lineup features data converters, which are critical for transforming real-world analog signals into digital data and subsequently converting digital data back into analog signals. They also provide power management and reference devices, essential for power conversion, driver supervision, system sequencing, and energy optimization in industries such as automotive, telecommunications, industrial applications, and premium consumer markets. These power ICs are supported by integrated performance, integration, and software design simulation tools for precise power supply development. ADI's portfolio further includes high-performance amplifiers, designed for conditioning analog signals, as well as radio frequency (RF) and microwave ICs that underpin cellular infrastructure. They also develop microelectromechanical systems (MEMS) technology, encompassing accelerometers for sensing acceleration, gyroscopes for measuring rotation, inertial measurement units (IMUs) for detecting multi-axis movement, broadband switches for radio and instrumentation systems, and isolators. Moreover, the company supplies digital signal processing (DSP) and system products engineered for rapid numeric calculations. Serving a wide array of clients across the industrial, automotive, consumer, instrumentation, aerospace, and communications sectors, Analog Devices distributes its products globally. This is accomplished via a multifaceted approach, including a direct sales force, authorized third-party distributors, independent sales representatives throughout the United States, the Americas, Europe, Japan, China, and other regions of Asia, in addition to its online platform. Analog Devices, Inc. was founded in 1965 and is headquartered in Wilmington, Massachusetts.
- Sector
- Technology
- Industry
- Semiconductors
- CEO
- Vincent T. Roche