Diodes Incorporated Common Stock (DIOD)

FairStock Score: 34/100 — RISKY

Key Financials

Strengths

• Generates $144 million in annual free cash flow (3.1% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Conservative balance sheet with debt-to-equity of just 0.05, providing financial flexibility
• Altman Z-Score of 7.1 confirms minimal bankruptcy risk and strong solvency
• Revenue growth of 15.4% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($36) with negative 180% margin of safety—limited downside protection

AI Analysis

Diodes Incorporated Common Stock is a small-cap technology company valued at $4.7 billion. The business generates $1.5 billion in annual revenue with a 0.7% net margin and $144 million in free cash flow. From a quality standpoint, Diodes shows solid Piotroski F-Score of 7/9 and Altman Z-Score of 7.1 confirms fortress-level solvency. On valuation, the stock is commanding a steep 70.2x multiple, with trades far above its Graham Number ($36) with no margin of safety. Growth dynamics show revenue growing at 15.4% and profit growth of 23.8%. Our composite FairStock Score of 34/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Diodes's 15% revenue growth trajectory could accelerate as it captures additional market share in the technology sector. With $144 million in annual free cash flow (3.1% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 70x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer