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Analog Devices (NASDAQ:ADI) has had an impressive year as they beat both top and bottom line expectations for the 13th consecutive quarter. But this most recent quarter was one of the most impressive as revenues grew by +54% year over year with EPS growth of +38%. Further, the company now controls about +10% of the $40 billion world’s market share in the analog segment.
Outside of internal innovation, the company has recently made two key acquisitions that have already begun to positively impact both the top and bottom lines. In June, Analog acquired Hittite Microwave Corp (HITT) to complement its Radio Frequency (RF) and signal conversion expertise. Then in July, management announced the acquisition of Linear Technology (NASDAQ:LLTC) to increase its presence and portfolio of products in the industrial, communications infrastructure, and automotive sectors.
In order to integrate these two new companies within Analog, the board of directors hired a new CFO, Prashanth Mahendra-Rajah. Prashanth has a solid track record in finance and integration experience. Outside of the integration, he has stated that he is also focused on both operational and spending discipline especially within the engineering segment.
Mr. Mahendra-Rajah’s leadership has already begun to pay dividends for the company and its shareholders, as management increased both earnings and revenue estimates for the next quarter, and is now expecting long-term EPS growth between 8-15%. Another tailwind for the company is the continuation of high demand for semiconductors and analog devices.
This sustained success can be seen in the company’s Price and Earnings Consensus graph below. As you can see the stock price has been on an uptick since the beginning of 2016, and annual earnings estimates have risen as well.
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