SemiLEDS Corporation Common Stock (LEDS)

FairStock Score: 18/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a Buffett-and-Graham-minded investor, I look first for durable earning power and a margin of safety. SemiLEDs fails the first test on history: FairStock's Lynch rule says no category fits because it lost money in each of the last four years, and reported annual net income was negative in FY2023, FY2024, and FY2025, including a $1.1M loss in FY2025. Revenue has been erratic: fiscal Q3 2026, the quarter ended 2026-05-31, produced $9.1M of revenue, $1.5M of net income, and $0.18 diluted EPS, but that revenue was down from $17.7M in fiscal Q3 2025, the quarter ended 2025-05-31. The latest profit is encouraging, but one quarter does not make a moat. In semiconductors and LEDs, scale, technology, and customer stickiness matter; with only 118 employees and a $17.1M market cap, this is a nano-cap with limited evidence of pricing power. Financial health is mixed. Trailing free cash flow of $3.9M and a 22.6% FCF yield are striking, and the Piotroski F-Score of 8/9 suggests improvement. But the Altman Z-Score of -13.61 signals high distress risk, ROE is -28.73%, ROCE is -4.47%, and debt-to-equity is 0.76. Valuation offers no obvious Graham-style safety: at the 2026-10-13 close of $2.07, P/B is 5.59 and P/E is negative. I would need several quarters of positive earnings and stable revenue before treating this as anything more than a speculative turnaround.

In plain English: SemiLEDs makes LED chips, components, and lighting products. The business looks weak overall: it has lost money in each of the last four years and sales in the latest reported quarter were down sharply from a year earlier, although that quarter did show a profit and some cash generation. At $2.07, the price does not look clearly cheap against the company's reported profits or accounting value; it depends heavily on whether the recent profit can last.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q3 2026 10-Q (period ended 2026-05-31) · fiscal Q2 2026 10-Q (period ended 2026-02-28) · fiscal Q1 2026 10-Q (period ended 2025-11-30) · fiscal Q3 2025 10-Q (period ended 2025-05-31) · FY2025 10-K (period ended 2025-08-31) · FY2024 10-K (period ended 2024-08-31) · FY2023 10-K (period ended 2023-08-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer