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Winners And Losers Of Q1: Analog Devices (NASDAQ:ADI) Vs The Rest Of The Analog Semiconductors Stocks


Radek Strnad /
2022/06/24 3:21 am EDT
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Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at Analog Devices (NASDAQ:ADI), and the best and worst performers in the analog semiconductors group.

Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. The biggest secular growth drivers currently are the adoption of electric vehicles, 5G networks and Internet of Things connectivity, and demand for chips that reduce power consumption. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.

The 9 analog semiconductors stocks we track reported a decent Q1; on average, revenues beat analyst consensus estimates by 2.31%, while on average next quarter revenue guidance was 1.65% above consensus. There has been a stampede out of high valuation technology stocks and while some of the analog semiconductors stocks have fared somewhat better, they have not been spared, with share price declining 10.7% since earnings, on average.

Analog Devices (NASDAQ:ADI)

Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ:ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.

Analog Devices reported revenues of $2.97 billion, up 78.8% year on year, beating analyst expectations by 4.82%. It was a very strong quarter for the company, with a beat on the bottom line and a significant improvement in operating margin.

“ADI delivered its fifth consecutive quarter of record revenue, illustrating the unprecedented demand for our technologies and our ability to increase output in a challenging supply backdrop. Top line strength combined with successful synergy execution enabled adjusted gross margin, operating margin and EPS to achieve new highs,” said Vincent Roche, CEO and Chair.

Analog Devices Total Revenue

Analog Devices pulled off the strongest analyst estimates beat and fastest revenue growth of the whole group. The stock is down 11.2% since the results and currently trades at $145.52.

We think Analog Devices is a good business, but is it a buy today? Read our full report here, it's free.

Best Q1: Monolithic Power Systems (NASDAQ:MPWR)

Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ: MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.

Monolithic Power Systems reported revenues of $377.7 million, up 48.4% year on year, beating analyst expectations by 4.8%. It was a very strong quarter for the company, with a beat on the bottom line and a very optimistic guidance for the next quarter.

Monolithic Power Systems Total Revenue

The stock is down 2.81% since the results and currently trades at $399.65.

Is now the time to buy Monolithic Power Systems? Access our full analysis of the earnings results here, it's free.

Weakest Q1: Skyworks Solutions (NASDAQ:SWKS)

Result of a merger of Alpha Industries and the wireless communications division of Conexant, Skyworks Solutions (NASDAQ: SWKS) is a designer and manufacturer of chips used in smartphones, autos, and industrial applications to amplify, filter, and process wireless signals.

Skyworks Solutions reported revenues of $1.33 billion, up 13.9% year on year, in line with analyst expectations. It was a weak quarter for the company, with an underwhelming revenue guidance for the next quarter and an increase in inventory levels.

Skyworks Solutions had the weakest performance against analyst estimates in the group. The stock is down 21% since the results and currently trades at $94.20.

Read our full analysis of Skyworks Solutions's results here.

ON Semiconductor (NASDAQ:ON)

Spun out of Motorola in 1999, and built through a series of acquisitions, ON Semiconductor (NASDAQ: ON) is a global provider of analog chips with specialization in autos, industrial applications, and power management in cloud data centers.

ON Semiconductor reported revenues of $1.94 billion, up 31.2% year on year, beating analyst expectations by 2.01%. It was a very strong quarter for the company, with a significant improvement in gross margin.

The stock is down 3.22% since the results and currently trades at $50.40.

Read our full, actionable report on ON Semiconductor here, it's free.

Microchip Technology (NASDAQ:MCHP)

Spun out from General Instrument in 1987, Microchip Technology (NASDAQ: MCHP) is a leading provider of microcontrollers and integrated circuits used mainly in the automotive world, especially in electric vehicles and their charging devices.

Microchip Technology reported revenues of $1.84 billion, up 25.7% year on year, beating analyst expectations by 1.4%. It was a strong quarter for the company, with a beat on the bottom line, and revenue guidance for the next quarter above analysts' estimates.

The stock is down 10.1% since the results and currently trades at $57.88.

Read our full, actionable report on Microchip Technology here, it's free.

The author has no position in any of the stocks mentioned