Analog Devices, Inc. (NASDAQ: ADI) remains one of the most profitable names in the semiconductor industry. While the sector has faced mixed demand trends, ADI’s margin strength and cash generation have kept investors confident. Shares trade near $233, slightly below their recent highs around $258.
Recently, Analog Devices reported strong fiscal Q3 2025 results that exceeded expectations, driven by strength in its industrial and automotive segments. Revenue and adjusted earnings both grew year over year, reflecting resilient demand and effective cost management. Gross margins remained solid above 60%, and management highlighted improving order trends heading into 2026. The company also continues to invest in expanding its European operations and next-generation analog solutions, underscoring its focus on long-term, sustainable growth.
This article explores where Wall Street analysts expect ADI’s stock to trade by 2027, based on consensus price targets and TIKR’s Guided Valuation Model. These figures reflect analyst estimates and not TIKR’s own projections.
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Analyst Price Targets Suggest Modest Upside
Analog Devices trades near $233/share today. The average analyst price target is $269/share, suggesting around 14% upside over the next year. Forecasts show a wide range that reflects mixed expectations across Wall Street:
- High estimate: ~$310/share
- Low estimate: ~$155/share
- Median target: ~$280/share
- Ratings: 19 Buys, 4 Outperforms, 11 Holds
For investors, this implies modest upside that could expand if demand stabilizes faster than expected. Analysts generally see ADI as a high-quality compounder with room to outperform if industrial and automotive orders rebound in 2025. The stock’s steady free cash flow and consistent dividend growth also make it an appealing choice for patient investors seeking reliability over flashier tech names.
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Analog Devices: Growth Outlook and Valuation
The company’s fundamentals remain strong, anchored by resilient margins and disciplined capital management:
- Revenue growth: ~13% annually through 2027
- Operating margins: ~45%
- Forward P/E: ~26x
- Based on analysts’ average estimates, TIKR’s Guided Valuation Model using a 26x forward P/E suggests ~$336/share by 2027
- That implies about 43% total returns or roughly 19% annualized.
For investors, that points to steady compounding potential if ADI maintains its pricing power and expands in high-growth areas like automotive sensors, factory automation, and communications infrastructure. While not a deep-value play, the valuation looks fair for a company that consistently converts earnings into strong cash flow and shareholder returns.
Analog Devices Guided Valuation Model Results
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What’s Driving the Optimism?
Analog Devices continues to stand out as one of the most consistent performers in the semiconductor space. Its strength lies in high-performance analog and mixed-signal chips that are critical to automotive, industrial, and communications applications. As more vehicles and factories become digitally connected, ADI’s technology plays an essential role in sensing, power management, and signal conversion.
Management’s disciplined focus on innovation and operational efficiency has allowed the company to sustain strong margins even during demand slowdowns. ADI also continues to return significant cash to shareholders through dividends and buybacks, supported by healthy free cash flow. For investors, these factors point to a business that can weather semiconductor cycles while continuing to compound steadily over time.
Bear Case: Valuation and Cyclical Risks
Even with these strengths, valuation remains a consideration. ADI trades near a premium relative to peers like Texas Instruments and NXP, reflecting the market’s confidence in its execution and margin resilience. However, that also means expectations are high.
If industrial and communications demand recover more slowly than expected, or if pricing pressure builds as inventories normalize, ADI’s earnings growth could flatten. For investors, that suggests limited short-term upside unless the next demand cycle ramps up faster than forecasted.
Outlook for 2027: What Could Analog Devices Be Worth?
Based on analysts’ average estimates, TIKR’s Guided Valuation Model using a 26x forward P/E suggests ADI could trade around $336/share by 2027, representing about 43% total returns or roughly 19% annualized.
While this outlook assumes steady margin strength and moderate demand recovery, stronger growth in automotive and factory automation could push returns higher. For investors, ADI looks like a high-quality compounder that offers consistent value creation rather than explosive gains, rewarding patience through resilient cash flow and disciplined management.
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