DIOD
Diodes Incorporated
$82.85
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Mild
·
Conviction
Overvalued
Trading 5.5% above fair value
You pay
$82.85
Bear
$58.92
Fair
$78.56
Bull
$98.20
Bear
$58.92
-28.9%
$4.91 × 12x
Fair
$78.56
-5.2%
$4.91 × 16x
Bull
$98.20
+18.5%
$4.91 × 20x
Adjust Assumptions
16.0x
4.91$
Key Value Driver
Through-cycle normalized EPS ($4.91)
Implied Market Multiple
16.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (13 analysts)
$163.50
Divergence from AlphaVal
52%
Summary
Using 7-year normalized EPS of $4.91 at a 16x cycle multiple, the base-case value is $78.56 per share. P/TBV cross-check: 2.3x.
Warnings
Price-to-book value of 2.3x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
Wall Street's average price target is $163.50 (from 13 analysts). Our estimate is 52% below the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing