ADI Climbed 11% In A Week. How Confident Are You In The Stock?
Analog Devices (ADI) stock is up 10.9% in 5 trading days. Already own the stock or planning to buy? You might want to re-consider based on the valuation as the stock now looks expensive. Consider the following data:
- Size: A $126 Bil company with $10 Bil in revenue currently trading at $255.63.
- Fundamentals: Last 12 month revenue growth of 7.1% and operating margin of 25.3%.
- Liquidity: Has Debt to Equity ratio of 0.1 and Cash to Assets ratio of 0.1
- Valuation: Currently trading at P/E multiple of 64.6 and P/EBIT multiple of 47.6
- Has returned (median) 74.9% within a year following sharp dips since 2010. See ADI Dip Buy Analysis.
While we like to ride the momentum if the fundamentals check out – for ADI, see Buy or Sell ADI Stock – we are vary of bull traps. Specifically, it is worth trying to answer if things get really bad, and ADI drops 20-30% to $178.94 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Analog Devices (ADI) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has been more resilient than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Below are the details, but before that, as a quick background: ADI provides data converters, high-performance amplifiers, and RF/microwave ICs for analog and digital signal processing across industrial, automotive, consumer, aerospace, and communications markets.
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2022 Inflation Shock
- ADI stock fell 27.6% from a high of $188.80 on 19 November 2021 to $136.73 on 14 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 15 February 2023
- Since then, the stock increased to a high of $255.63 on 26 August 2025 $255.63
| ADI | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -27.6% | -25.4% |
| Time to Full Recovery | 124 days | 464 days |
2020 Covid Pandemic
- ADI stock fell 34.0% from a high of $124.55 on 20 February 2020 to $82.23 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 5 June 2020
| ADI | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -34.0% | -33.9% |
| Time to Full Recovery | 79 days | 148 days |
2018 Correction
- ADI stock fell 23.7% from a high of $102.02 on 12 June 2018 to $77.82 on 24 October 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 6 February 2019
| ADI | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -23.7% | -19.8% |
| Time to Full Recovery | 105 days | 120 days |
2008 Global Financial Crisis
- ADI stock fell 60.3% from a high of $40.56 on 9 May 2007 to $16.10 on 1 December 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 11 February 2011
| ADI | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -60.3% | -56.8% |
| Time to Full Recovery | 802 days | 1480 days |
Worried that ADI could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.