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Diodes (DIOD) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Diodes (DIOD - Free Report) ? Shares have been on the move with the stock up 5.6% over the past month. DIOD hit a new 52-week high of $39.06 in the previous session. Diodes has gained 35.7% since the start of the year compared to the 12.8% move for the Zacks Computer and Technology sector and the 0.1% return for the Zacks Electronics - Semiconductors industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 7, 2018, Diodes reported EPS of $0.58 versus consensus estimate of $0.54.
For the current fiscal year, Diodes is expected to post earnings of $2.17 per share on $1.2 billion in revenues. This represents a 58.39% change in EPS on a 13.96% change in revenues. For the next fiscal year, the company is expected to earn $2.35 per share on $1.26 billion in revenues. This represents a year-over-year change of 8.29% and 4.56%, respectively.
Valuation Metrics
Diodes may be at a 52-week high right now, but what might the future hold for Diodes? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Diodes has a Value Score of B. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 17.9X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 11.6X versus its peer group's average of 13.5X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Diodes currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Diodes meets the list of requirements. Thus, it seems as though Diodes shares could have potential in the weeks and months to come.
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Diodes (DIOD) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Diodes (DIOD - Free Report) ? Shares have been on the move with the stock up 5.6% over the past month. DIOD hit a new 52-week high of $39.06 in the previous session. Diodes has gained 35.7% since the start of the year compared to the 12.8% move for the Zacks Computer and Technology sector and the 0.1% return for the Zacks Electronics - Semiconductors industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 7, 2018, Diodes reported EPS of $0.58 versus consensus estimate of $0.54.
For the current fiscal year, Diodes is expected to post earnings of $2.17 per share on $1.2 billion in revenues. This represents a 58.39% change in EPS on a 13.96% change in revenues. For the next fiscal year, the company is expected to earn $2.35 per share on $1.26 billion in revenues. This represents a year-over-year change of 8.29% and 4.56%, respectively.
Valuation Metrics
Diodes may be at a 52-week high right now, but what might the future hold for Diodes? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Diodes has a Value Score of B. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 17.9X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 11.6X versus its peer group's average of 13.5X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Diodes currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Diodes meets the list of requirements. Thus, it seems as though Diodes shares could have potential in the weeks and months to come.