What Happened:
Shares of manufacturer of analog chips, Analog Devices (NASDAQ:ADI) fell 6.18% in the pre-market session after the company reported second quarter results that narrowly beat analysts' estimates for revenue and earnings per share (EPS). However, free cash flow missed, and inventory levels increased. Revenue guidance for the next quarter came in below Consensus, with management calling for topline growth to moderate due to the "continued economic uncertainty and normalizing supply chains." The overall results were weak and highlighted the company's exposure to growing macro headwinds.
What is the market telling us:
Analog Devices's shares are not very volatile than the market average and over the last year have had only 5 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Analog Devices is up 6.49% since the beginning of the year, but at $172.50 per share it is still trading 12.5% below its 52-week high of $197.22 from March 2023. Investors who bought $1,000 worth of Analog Devices's shares 5 years ago would now be looking at an investment worth $1,820.
Is now the time to buy Analog Devices? Access our full analysis of the earnings results here, it's free.