ADINEUTRAL

Return on Equity (ROE)

6.7%

Higher than 47% of Technology sector peers

Updated 1928h ago

Sector Performance

47th percentile

ADI

6.7%

Sector Median

8.2%

Sector Avg

2.4%

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Deep Analysis

Return on Equity (ROE) measures how much profit a company generates for each dollar of shareholders’ equity — at 6.7%, Analog Devices is producing $0.067 in profit for every $1 of equity.

This is far below the sector median of 25.4%, placing ADI in the 4th percentile among technology peers, meaning only 4% of sector companies have a lower ROE. The metric has been entirely stable over the last eight quarters, with a year-over-year change of +0.0% and a quarter-over-quarter change of +0.0%. A low ROE that is not improving suggests the company is generating weak returns relative to its equity base, but the lack of decline reduces the immediate downside risk. For investors, this combination implies limited opportunity for equity-driven growth and no clear catalyst for a turn, but also no worsening trend to trigger alarm. This directly supports the overall NEUTRAL verdict — the weak level undermines a bullish case, while the stability prevents a bearish one, leaving the stock in a holding pattern.

Frequently Asked Questions

What does the Return on Equity (ROE) tell investors about ADI?

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.

How is the Return on Equity (ROE) calculated?

Return on Equity (ROE) is calculated as: Net Income / Shareholders' Equity.

How does ADI's Return on Equity (ROE) compare to its sector?

ADI's Return on Equity (ROE) of 6.7% compares to a Technology sector median of 8.2%, placing it in the 47th percentile.

Who are ADI's closest peers by Return on Equity (ROE)?

The closest Technology peers by Return on Equity (ROE) include: AMBA (-12.8%), WIX (-13.8%), SMAR (-17.3%), U (-20.1%), UCTT (-22.5%).

The Formula

Net Income / Shareholders' Equity

Why It Matters

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.