Manufacturer of analog chips, Analog Devices (NASDAQ:ADI) will be reporting earnings tomorrow before the bell. Here’s what to look for.

Analog Devices beat analysts’ revenue expectations by 1.6% last quarter, reporting revenues of $2.31 billion, down 24.9% year on year. It was a strong quarter for the company, with an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ EPS estimates.

Is Analog Devices a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Analog Devices’s revenue to decline 11.4% year on year to $2.41 billion, improving from the 16.4% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.64 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Analog Devices has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 1.5% on average.

Looking at Analog Devices’s peers in the analog semiconductors segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Impinj delivered year-on-year revenue growth of 46.4%, beating analysts’ expectations by 2.5%, and Himax reported a revenue decline of 6.8%, topping estimates by 1.1%. Impinj traded down 13.1% following the results while Himax was also down 1.1%.

Read our full analysis of Impinj’s results here and Himax’s results here.

Stocks generally had a good 2024. The Fed fought high inflation and won without sending the economy into a recession, otherwise lovingly known as a soft landing. The US Central Band is now cutting rates. That, plus the election of Donald Trump in November 2024, sent markets even higher, and while some of the analog semiconductors stocks have shown solid performance, the group has generally underpeformed, with share prices down 5.8% on average over the last month. Analog Devices is down 6.7% during the same time and is heading into earnings with an average analyst price target of $253.05 (compared to the current share price of $214.70).

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