DCF Studio

    ADI · NMS · Technology

    Analog Devices, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 252.70

    Market price

    USD 412.85

    Implied upside

    -38.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-10-31

    Current EV/EBITDA of 41.0x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 252.70-38.8%
    Exit multiple
    USD 435.02+5.4%
    Market price
    USD 412.85

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn6bn13bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 15.1bnUSD 18.4bnUSD 21.9bnUSD 25.6bnUSD 29.3bnUSD 32.8bnUSD 36.0bnUSD 38.6bnUSD 40.5bnUSD 41.5bn+11.9%
    EBITUSD 4.2bnUSD 5.1bnUSD 6.1bnUSD 7.1bnUSD 8.1bnUSD 9.1bnUSD 10.0bnUSD 10.7bnUSD 11.3bnUSD 11.5bn+11.9%
    NOPATUSD 3.8bnUSD 4.6bnUSD 5.5bnUSD 6.4bnUSD 7.4bnUSD 8.2bnUSD 9.0bnUSD 9.7bnUSD 10.2bnUSD 10.4bn+11.9%
    Add depreciation & amortisationUSD 3.0bnUSD 3.6bnUSD 4.3bnUSD 5.0bnUSD 5.7bnUSD 6.4bnUSD 7.0bnUSD 7.6bnUSD 7.9bnUSD 8.1bn+11.9%
    Less capital expenditureUSD -1.1bnUSD -1.4bnUSD -1.9bnUSD -2.4bnUSD -2.9bnUSD -3.5bnUSD -4.1bnUSD -4.7bnUSD -5.2bnUSD -5.6bn+20.0%
    Capex, % of revenue7.2%7.9%8.6%9.3%10.0%10.7%11.4%12.1%12.8%13.5%-
    Less increase in working capitalUSD -922.2mUSD -733.6mUSD -793.5mUSD -828.3mUSD -830.3mUSD -793.1mUSD -712.6mUSD -588.3mUSD -424.0mUSD -227.5m-14.4%
    Free cashflow to firmUSD 4.7bnUSD 6.0bnUSD 7.1bnUSD 8.2bnUSD 9.3bnUSD 10.4bnUSD 11.3bnUSD 12.0bnUSD 12.5bnUSD 12.7bn+11.6%
    Discount factor0.95500.87110.79450.72460.66090.60280.54980.50150.45740.4172-
    Present valueUSD 4.5bnUSD 5.3bnUSD 5.7bnUSD 6.0bnUSD 6.2bnUSD 6.2bnUSD 6.2bnUSD 6.0bnUSD 5.7bnUSD 5.3bn-
    Present Value Of The ForecastUSD 57.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.172Reported 1.256, pulled toward 1.0 (Blume)
    Cost of equity9.85%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 9.5x interest cover. Book interest / average debt was lower, at 3.9%.
    Market capitalisationUSD 200.1bn95.8% of capital
    Total debtUSD 8.7bn4.2% of capital, book value as a proxy
    Tax rate9.7%Effective, capped at statutory
    WACC9.64%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 252.70

    56% of EV

    Forecast FCFF, final year
    USD 12.7bn
    Capex at depreciation, working capital in reinvestment
    USD 16.6bn
    Less reinvestment at g/ROIC (25.9% of NOPAT)
    USD -4.3bn
    Capitalised
    USD 12.3bn
    ROIC (WACC floor)
    9.6%
    Terminal value, undiscounted
    USD 176.2bn
    Terminal value, discounted
    USD 73.5bn
    Enterprise value
    USD 130.5bn
    Less net debt
    USD 5.0bn
    Equity value
    USD 125.5bn

    Exit at 20.0x EBITDA

    Value per shareUSD 435.02

    74% of EV

    Terminal value, undiscounted
    USD 393.3bn
    Terminal value, discounted
    USD 164.1bn
    Enterprise value
    USD 221.1bn
    Less net debt
    USD 5.0bn
    Equity value
    USD 216.1bn

    Spread between methods: 53%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.64%341.82337.33332.84328.35323.86
    8.64%295.49291.74287.99284.24280.49
    9.64%259.05255.88252.70249.53246.35
    10.64%229.70226.98224.26221.54218.82
    11.64%205.60203.25200.89198.54196.19

    Outlined: this model. Green text: above today's price of 412.85. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-2.8%14.2%20.6%
    EBIT margin32.4%27.8%53.7%
    Discount rate-9.6%6.5%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.