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Diodes (DIOD) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Diodes (DIOD) closed the most recent trading day at $39.63, moving +1.54% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.69%. Elsewhere, the Dow gained 0.65%, while the tech-heavy Nasdaq added 0.58%.

Heading into today, shares of the semiconductor components maker had gained 15.71% over the past month, outpacing the Computer and Technology sector's gain of 2.27% and the S&P 500's gain of 1.36% in that time.

Investors will be hoping for strength from DIOD as it approaches its next earnings release, which is expected to be August 5, 2019. On that day, DIOD is projected to report earnings of $0.75 per share, which would represent year-over-year growth of 29.31%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $322 million, up 5.89% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.80 per share and revenue of $1.25 billion, which would represent changes of +17.65% and +3.02%, respectively, from the prior year.

Any recent changes to analyst estimates for DIOD should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. DIOD is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that DIOD has a Forward P/E ratio of 13.94 right now. For comparison, its industry has an average Forward P/E of 18.77, which means DIOD is trading at a discount to the group.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 46, which puts it in the top 18% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DIOD in the coming trading sessions, be sure to utilize Zacks.com.


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