Based on the provided data and current valuation metrics, I'll analyze whether ADI is overvalued.
Valuation Analysis
ADI currently trades at elevated multiples with a P/E of 68.93, significantly higher than its historical quarterly trend from Q1-Q4 2024 (ranging from 35.34 to 68.93). The EV/EBITDA ratio has also expanded considerably to 28.07 in Q4 2024 from 17.75 in Q1 2024.
Analyst Consensus
Recent analyst actions suggest mixed views. While Truist Securities raised their price target to $230 (7.83% upside) on January 10, 2025, Barclays maintained a Hold rating with a lower $210 target (-3.88% downside) on January 17, 2025. The overall analyst consensus shows a mix of Hold and Buy ratings, indicating some concerns about current valuation levels.
Market Position
ADI's P/S ratio of 11.93 and P/B ratio of 3.18 in Q4 2024 are at the high end of their 2024 ranges, suggesting rich valuation multiples across various metrics. The declining dividend yield trend (from 1.79% to 1.61% through 2024) also indicates potential overvaluation.
Technical View
Conclusion
ADI appears overvalued based on its historically high multiples across all key valuation metrics, stretched technical indicators, and mixed analyst sentiment. The significant expansion in P/E and EV/EBITDA ratios, coupled with declining dividend yields, suggests the stock is trading above its fair value range.