Diodes Inc. (DIOD) has a very bullish next-year estimate as the company projects solid revenue growth paired with higher margins and steady costs.
Company Description
Diodes Inc., together with its subsidiaries, manufacture and sells semiconductor products to semiconductor manufacturers in various industries worldwide. The company was founded in 1959 and has a market cap of $931 million.
Shares of DIOD have posted big gains over the last 5 months as economic stability has led investors to anticipate stronger demand for technology products. The company’s second-quarter results, reported August 6, also gave its share price an extra boost.
Second-Quarter Results
Sales were up 33% from last year to $103.9 million. Earnings came in 6 cents per share, better than the Zacks Consensus Estimate calling for a loss of 2 cents.
Diodes noted that its gross margin expanded during the quarter to 26% of revenue from 18.6% last year. The company also has a strong cash position with $429 million in cash and short-term investments.
Expenses Hold Steady
Also helping drive the company’s strong quarterly profit, CEO Dr. Keh-Shew Lu noted that operating expenses were basically flat from last quarter.
Zacks Consensus Estimate Rising
Estimates have been steadily climbing for the last few months, with the current year up 17 cents to 5 cents per share. The next-year estimate is very bullish, projecting earnings of 82 cents.
Valaution
Based upon the bullish next-year estimate, this stock has a P/E multiple of 26X, a fairly steep premium to the overall market.
The Chart
Shares of DIOD are up big since bottoming out at $2.75 in November of last year, having recently topped off above $22. Take a look at the nice trend higher below.
