Analog Devices Inc: Apple design loss fueled consumer biz declines to offset B2B rev growth; Maintain Hold
Our Take:We continue to believe ADI would underperform its semiconductor peer group in FY18 given that Linear Technology acquisition cost synergies have largely played out. While we expect to see YoY continued dollar content growth in the Industrial and Automotive end-markets, design loss at Apple Inc. (AAPL: NR) and mixed prospects for communications end-market leads will moderate growth meaningfully in FY18.
Analog Devices is an analog technology company. The company designs, manufactures, and markets a portfolio of solutions, including integrated circuits, algorithms, software, and subsystems. The company's analog products include data converter that translate real-world analog signals into digital data and also translate digital data into analog signals, amplifiers that condition analog signals, and power management and reference products that include functions such as power conversion, driver monitoring, sequencing and energy management. The company's digital signal processing products are designed to execute software programs, or algorithms, associated with processing digitized real-time, real-world data.
Summit Insights Group LLC (SIG), founded by Srini Nandury in 2018, is a fundamentals-driven, technology-focused, equity research boutique. SIG analysts cover Semiconductors, Semicap Equipment, Enterprise & Application Software, and IT Hardware & Storage companies. The firm also provides insight into adjacent areas such as Mobile and Internet Technologies.
SIG provides deep, rigorous technology and financial analysis, unlike Wall Street analysis that is mainly driven by financial models. SIG principal analysts are known for their extensive industry experience, which we believe is essential to evaluate technology industry stocks. Each principal analyst has at least 5 years of hands-on industry experience prior to their tenure in equity analysis. SIG analysts are known for making non-consensus prescient stock calls.
SIG analysts follow more than 100 stocks regularly in the areas of Enterprise and Application Software, Storage, Networking, Security, Flash Memory, Big Data, Storage Networking, SSD and Processors. SIG analysts have access to the managements of both public and private companies to verify factual items from public comments or published statements, buttressing the integrity of our analysis. SIG analysts regularly attend industry conferences and visit startup companies to understand technology trends driving the industry. SIG is not a broker dealer, hence it does not have investment banking or trading conflicts. At SIG, we value integrity, our client interests and confidentiality above all else.
Mr. KinNgai Chan joined Summit Insights Group with 15 years of experience as an equity analyst covering the semiconductor sector at Rosenblatt Securities, The Juda Group and Sanders Morris Harris Group. Prior to his Wall Street career, Mr. Chan has held various positions in strategic planning, purchasing, marketing and business development in the PC and Communication systems, components and integrated circuits. Mr. Chan has interacted with leading technology companies such as Intel, AMD, Micron Technology, nVidia, Broadcom, Samsung, Toshiba, Western Digital as well as Asian ODMs. With over nine years of industry experience in the PC Semiconductor as well as the Communications Semiconductor industry, Mr. Chan is able to provide institutional investors with unique and differentiated research. Chan received his MBA from the University of Arizona and graduated Magna Cum Laude from California State University, Chico, where he earned his BS.
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