Diodes (DIOD) One Off Gain Clouds 50.2% Earnings Jump Narrative

Diodes (DIOD) has wrapped up FY 2025 with fourth quarter revenue of US$391.6 million and basic EPS of US$0.22, supported by trailing twelve month revenue of about US$1.5 billion and EPS of US$1.43. The company has seen quarterly revenue range from US$332.1 million to US$392.2 million over the past year, with basic EPS moving from a loss of US$0.10 in Q1 2025 to a peak of US$0.99 in Q2 2025 before moderating in the second half. This sets up a picture where improving trailing margins and a reported 50.2% earnings uplift frame the latest results as a test of how durable that profitability really is.

See our full analysis for Diodes.

With the numbers on the table, the next step is to see how this earnings profile lines up with the most widely held narratives about Diodes, and where the data might push you to reassess the story.

See what the community is saying about Diodes

Margins Still Thin At 4.5% Net

• Over the last 12 months, Diodes generated US$1.5b in revenue and US$66.1 million in net income, which works out to a 4.5% net margin compared with 3.4% a year earlier.
• Bulls point to higher content in areas like automotive and AI servers as a path to stronger margins, yet the latest quarterly net income of US$10.2 million on US$391.6 million of revenue shows that, so far, the business is still operating on fairly slim profitability.
  • Supporters of the bullish view highlight the 50.2% earnings growth over the last year as evidence that margin expansion is underway, while the current 4.5% margin suggests that any future shift to higher margin products would have a visible impact on earnings.
  • At the same time, the one off gain of US$35.5 million within the trailing period means part of that earnings uplift is not from repeatable operations, which makes it harder for the bullish case to lean solely on recent margin progress.

Bulls argue that this margin profile is just the starting point for Diodes, not the destination, and the full thesis is laid out in the 🐂 Diodes Bull Case

Earnings Jump Includes One Off Boost

• Trailing earnings grew 50.2% over the last year on US$1.5b of revenue, but that figure includes a US$35.5 million one off gain that inflated reported profit compared with what the core business would have delivered on its own.
• Skeptics argue that relying on one off items is risky for valuation, and the quarterly pattern over FY 2025, from a loss of US$4.4 million in Q1 to US$46.1 million in Q2 then down to US$14.3 million and US$10.2 million in Q3 and Q4, gives some fuel to the bearish view that earnings can be quite volatile.
  • The bearish narrative flags exposure to cyclical markets and price pressure, and the swing from a Q1 loss to a Q2 spike and then lower Q3 and Q4 profits is consistent with earnings that move around rather than follow a smooth path.
  • On the other hand, the fact that trailing net income across the last four quarters reached US$66.1 million shows the business is profitable overall, which is more supportive than a simple focus on the weakest individual quarter would suggest.

Skeptics focus on how much of that 50.2% earnings growth is repeatable, and you can see their full case in the 🐻 Diodes Bear Case

Premium P/E Versus Industry And DCF

• At a share price of US$78.00 and trailing EPS of US$1.43, Diodes trades on a P/E of 54.1x, compared with 44.6x for the wider US Semiconductor industry and a DCF fair value in the dataset of US$20.33 per share.
• Consensus narrative suggests that higher growth areas like AI related computing and automotive content could justify a premium multiple, yet the combination of a 54.1x trailing P/E and a DCF fair value of US$20.33 leaves a clear gap between the current share price and at least one model of intrinsic value.
  • Supporters of the growth story point to revenue growth forecasts of about 10.9% per year and expected earnings growth of roughly 33.8% per year as reasons the market might be willing to pay above the industry average multiple.
  • Investors who focus on valuation, however, may weigh the DCF fair value of US$20.33 against the US$78.00 share price and the 4.5% net margin and decide that a lot of improvement in profitability needs to show up in future numbers to keep that premium in place.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Diodes on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

See the numbers a different way? Take a couple of minutes to test your own view against the data and shape a fresh narrative: Do it your way

A great starting point for your Diodes research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

See What Else Is Out There

The combination of a 4.5% net margin, earnings helped by a US$35.5 million one off gain, and a 54.1x P/E suggests Diodes carries rich pricing without fully proven underlying profitability strength.

If you want ideas where the market may be less demanding on the current numbers, take a few minutes to scan our 51 high quality undervalued stocks that could better align with your return expectations.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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