Analog Devices (ADI) rises 74.7% as valuation reaches 34.7 times forward earnings

Analog Devices (NASDAQ: ADI) shares have climbed 74.7% over the past six months to $421.90, supported partly by solid quarterly results and stronger investor sentiment toward the semiconductor maker. The company posted a five-year compound annual sales growth rate of 14.9%, above the semiconductor industry average cited in the report. Its free cash flow margin averaged 36.7% over the past two years, ranking among the stronger cash-generation profiles in the sector. One weaker metric was capital efficiency. Analog Devices’ five-year average return on invested capital was 5.9%, below top semiconductor peers that regularly generate returns above 35%. Following the rally, the stock trades at 34.7 times forward earnings.