Diodes Incorporated (DIOD) DCF Valuation & Fundamental Primer
Diodes Incorporated (DIOD) currently trades at $52.03 with an enterprise value of $951.5M. Our proprietary institutional model rates Diodes Incorporated at 66/100 (Grade: B+ · Quality Software Operator). The current market price prices in an implied 5-year revenue CAGR of 38.6% vs. historical growth of 14.6% (Aggressive Growth Expectations Priced In).
Institutional fundamental teardown of Diodes Incorporated (DIOD) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Diodes Incorporated (DIOD) 3-Scenario DCF Valuation Range
Stress-test DIOD's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $52.03).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $25.46 -51% | $26.89 -48% | $28.56 -45% | $30.54 -41% | $32.91 -37% |
| 9.3% | $23.13 -56% | $24.26 -53% | $25.55 -51% | $27.05 -48% | $28.82 -45% |
| 10.0% | $21.21 -59% | $22.12 -57% | $23.14 -56% | $24.32 -53% | $25.68 -51% |
| 10.8% | $19.60 -62% | $20.35 -61% | $21.18 -59% | $22.12 -57% | $23.19 -55% |
| 11.5% | $18.24 -65% | $18.86 -64% | $19.54 -62% | $20.30 -61% | $21.16 -59% |
Institutional Software Quality Scorecard (66/100 · Grade B+)
Solid software model with clear operating leverage, partially offset by standard SBC or moderate burn.
Positive FCF but lower conversion efficiency due to capex or timing
Standard software SBC dilution; modest equity transfer to employees
Solid gross margins with potential for operating leverage at scale
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- Net cash positive: $122.1M balance sheet buffer
Key Operational & Dilution Risks
Reverse-DCF Solver: What Growth is Priced Into DIOD?
The current share price demands 38.6% 5-year CAGR (57.6% net of SBC & dilution)—a +24.0% acceleration over historical run-rate (14.6%). Any growth slowdown risks valuation multiple contraction.
Headline Reverse-DCF ignores Stock-Based Compensation (9.9% of revenue) and annual share dilution (1.8%/yr). Accounting for both requires 57.6% 5-year revenue CAGR to justify $52.03/sh on a true per-share economic cash flow basis.
Diodes Incorporated (DIOD) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $344.8M | $344.8M | $395.1M | $452.8M | $518.9M | $594.7M | $681.5M |
| Gross Profit | $257.9M | $257.9M | $295.5M | $338.7M | $388.1M | $444.8M | $509.8M |
| Operating Income (EBIT) | $-4.5M | $-4.5M | $-5.1M | $-5.9M | $-6.7M | $-7.7M | $-8.9M |
| Stock-Based Compensation (SBC) | $34.1M | $34.1M | $39.1M | $44.8M | $51.4M | $58.9M | $67.5M |
| Unlevered Free Cash Flow (FCF) | $42.4M | $42.4M | $48.6M | $55.7M | $63.8M | $73.1M | $83.8M |
| SBC-Adjusted True Cash Flow | $8.3M | $8.3M | $9.5M | $10.9M | $12.5M | $14.3M | $16.4M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -7.7 + 0.39 × (Rule of 40) · R² = 54%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Diodes Incorporated | DIOD | $2.41B | $344.8M | 74.8% | 12.3% | 26.9% | 9.9% | 6.7× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 6.6× | $2.29B | $2.41B | $52.03 | 0.0% |
| -20% Multiple Compression | 5.3× | $1.83B | $1.96B | $42.15 | -20.0% |
| -35% Multiple Compression | 4.3× | $1.49B | $1.61B | $34.74 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $1.72B | $1.85B | $39.80 | -24.8% |
Frequently Asked Questions: Diodes Incorporated (DIOD) Valuation
What is Diodes Incorporated (DIOD)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Diodes Incorporated (DIOD) has a Base Case implied value of $23.14 per share (with a Bear Case of $12.46 and a Bull Case of $36.94), compared to its current price of $52.03. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Diodes Incorporated (DIOD)'s Rule of 40 score and Free Cash Flow margin?
Diodes Incorporated achieves a Rule of 40 score of 26.9%, combining a 14.6% revenue growth run-rate with a 12.3% TTM free cash flow margin on $344.8M in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into DIOD stock according to Reverse-DCF analysis?
At $52.03 per share (Enterprise Value of $2.29B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 38.6%, compared to Diodes Incorporated's historical CAGR of 14.6%. Overall market expectations are rated as "Aggressive Growth Expectations Priced In".
How does Diodes Incorporated compare to Software & Cloud Services software peers?
Diodes Incorporated (DIOD) earns an institutional Software Quality Score of 66/100 (Grade B+ — Quality Software Operator). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact Diodes Incorporated (DIOD)'s valuation?
Diodes Incorporated recorded $34.1M in TTM stock-based compensation (9.9% of revenue). When treating SBC as a cash-equivalent compensation expense, Diodes Incorporated's SBC-adjusted free cash flow yield is 0.3%, scoring 16/25 on our Shareholder Dilution Friction pillar.