Up 12% in 2024, You May Want to Buy This Semiconductor Stock Before It Goes on a Bull Run

Core Viewpoint - Analog Devices (ADI) has experienced significant declines in revenue and earnings recently, but there are indications that a turnaround is imminent, making it a potentially attractive long-term investment opportunity [1][2]. Financial Performance - For fiscal 2024 third-quarter results, Analog Devices reported a revenue decline of 25% year over year to $2.31 billion, with non-GAAP earnings down 37% to $1.58 per share [2]. - The industrial segment, which constitutes 46% of the company's revenue, saw a 37% year-over-year contraction due to oversupply and weak demand [2]. - The global semiconductor industry faced an 11% revenue decline in 2024, primarily due to weak demand for smartphones, personal computers, and data centers [3]. Future Projections - Management projects revenue for the current quarter to be between $2.30 billion and $2.50 billion, with adjusted earnings expected to range from $1.53 to $1.73 per share [3]. - Year-over-year revenue decline is anticipated to slow to 11% in the current quarter, indicating a potential stabilization in performance [3]. - Consensus estimates suggest a 24% revenue decline for fiscal 2024 to $9.38 billion, but a rebound is expected in fiscal 2025 with a 10% revenue increase to $10.35 billion and nearly 20% growth in earnings per share to $7.57 [5]. Market Conditions - There are signs that the inventory correction in Analog Devices' end markets may be nearing completion, with improved customer inventory levels and order momentum noted by the CEO [4]. - The company has not benefited from the AI trend as it does not produce GPUs, unlike competitors such as Nvidia and AMD [3]. Investment Outlook - If Analog Devices' financial performance improves alongside a recovery in its end markets, there is potential for stock price appreciation in the coming years [8][9].