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GuruFocus has detected 5 Warning Signs with Analog Devices Inc $ADI.
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Analog Devices Inc (NAS:ADI)
Intrinsic Value: Projected FCF
$39.85 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, Analog Devices Inc's projected FCF intrinsic value is $39.85. The stock price of Analog Devices Inc is $82.06. Therefore, Analog Devices Inc's Price to Intrinsic Value: Projected FCF Ratio of today is 2.1.

ADI' s Price to Intrinsic Value: Projected FCF Range Over the Past 10 Years
Min: 0.78   Max: 8.97
Current: 2.06

0.78
8.97

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of Analog Devices Inc was 8.97. The lowest was 0.78. And the median was 1.57.

ADI's Price to Intrinsic Value: Projected FCF is ranked lower than
66% of the 473 Companies
in the Global Semiconductors industry.

( Industry Median: 1.53 vs. ADI: 2.06 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here Analog Devices Inc's FCF(6 year avg) is calculate as

Analog Devices Inc Quarterly Data

201410201501201504201507201510201601201604201607201610201701
total_freecashflow 219145295162152197295216446286
201204201207201210201301201304201307201310201401201404201407
total_freecashflow 19698199140226190234109194171
201104201107201110201201
total_freecashflow 162220204190

Add all the Free Cash Flow together and divide 6 will get Analog Devices Inc's FCF(6 year avg) = $824.19.

Analog Devices Inc's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Jan17)*0.8)/Shares Outstanding
=(9.98815675147*824.191+5306.431*0.8)/313.076
=39.85

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

Analog Devices Inc's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

Price to Intrinsic Value: Projected FCF=Share Price/Intrinsic Value: Projected FCF
=82.06/39.8538811699
=2.06

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Analog Devices Inc Annual Data

Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14Oct15Oct16
Projected FCF 22.1927.2224.6832.7638.5136.2634.1135.1835.7237.87

Analog Devices Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
Projected FCF 35.1833.9735.2335.5335.7235.7635.9136.5537.8739.85
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