ANALOG DEVICES INC

High-quality diversified analog franchise with elite margins and free cash flow, recovering growth, and a conservative balance sheet.

Strengths

• Elite margins — gross margin 61.5% (88th), operating margin 26.6% (88th), net margin 20.6% (79th)
• Elite free cash flow — FCF margin 38.8% (96th), FCF $4.28B (95th), OCF margin 43.7% (95th)
• Recovering growth with low leverage — revenue +16.9%, net income +38.7% (84th), D/E 0.24

Risks

• Returns optically modest on a large acquired-equity base — ROE 6.7%, ROA 4.7% — goodwill from the Maxim/Linear deals
• International/geopolitical exposure — risk factors cite extensive operations in Ireland, the Philippines, Thailand and Malaysia plus tariff/trade-policy risk
• Analog/industrial demand cyclicality — qualitative (per 10-K)

Notable findings

• Customer concentration~56% of revenue from one customer/distributor — Fiscal 2025 Fiscal 2024 Revenue % of Total Revenue (1) Revenue % of Total Revenue (1) Distributors $ 6,144,819 56 % $ 5,505,779 58 % Direct customers 4,718,993 43 % 3,772,945 40 % Other 155
• Fund exitedNotable fund(s) exited this quarter: VANGUARD GROUP INC
• Exec changeRecent 8-K item 5.02 8-K ↗
• Strong balance sheetStrong balance sheet — $3.7B cash & investments
• Insider sellingInsider selling — 99 open-market sale(s) by 6 insider(s) (cluster of 6 insiders, ~$65M, last 6mo) Form 4 ↗
• China exposure• complex, varying and changing government regulations and legal standards and requirements, particularly with respect to tax, price protection, competition practices, export control, customs, immigra
• Notable holderHeld by 6 notable fund(s): STATE STREET CORP, FMR LLC, GOLDMAN SACHS GROUP INC +3 more (as of 2026-03-31)
• AccumulatingInstitutional holders rose 29→30 QoQ (2025-12-31→2026-03-31)