What Does The Future Hold For Diodes Incorporated (NASDAQ:DIOD)? These Analysts Have Been Cutting Their Estimates

The latest analyst coverage could presage a bad day for Diodes Incorporated (NASDAQ:DIOD), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the six analysts covering Diodes provided consensus estimates of US$1.5b revenue in 2024, which would reflect a definite 19% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to dive 45% to US$3.53 in the same period. Prior to this update, the analysts had been forecasting revenues of US$1.8b and earnings per share (EPS) of US$4.68 in 2024. Indeed, we can see that the analysts are a lot more bearish about Diodes' prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Diodes

It'll come as no surprise then, to learn that the analysts have cut their price target 24% to US$67.00.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Diodes' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 16% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 13% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 16% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Diodes is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Diodes. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on Diodes after today.

There might be good reason for analyst bearishness towards Diodes, like recent substantial insider selling. Learn more, and discover the 1 other warning sign we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.