SemiLEDs Corp (NASDAQ: LEDS)

Sector: Technology Industry: Semiconductors CIK: 0001333822
Market Cap 12.47 Mn
P/B 6.03
P/E -9.41
P/S 0.28
ROIC (Qtr) -37.68
Div Yield % 0.00
Rev 1y % (Qtr) 103.73
Total Debt (Qtr) 2.65 Mn
Debt/Equity (Qtr) 1.28

About

SemiLEDs Corp, a company with the ticker symbol LEDS, operates in the specialty lighting industry, focusing on the production of light emitting diode (LED) chips and components. The company's primary operating subsidiary is Taiwan SemiLEDs, which utilizes proprietary technology to create high-performance LED chips with low thermal resistance and high light extraction efficiency. This technology allows SemiLEDs to offer a wide range of LED chips, including blue, white, green, and UV LEDs. SemiLEDs Corp's main business activities revolve around the...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 2.73M provides robust 1.03x coverage of total debt 2.65M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 2.89M provide 2.06x coverage of short-term debt 1.40M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 14.12M provides 5.34x coverage of total debt 2.65M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 2.73M provides strong 25.76x coverage of stock compensation 106000, indicating sustainable incentive practices.
  • Operating cash flow of 2.73M provides exceptional 32.13x coverage of interest expenses 85000, showing strong debt service capability.

Bear case

  • Operating cash flow of 2.73M barely covers its investment activities of (474000), with a coverage ratio of -5.76, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (474000) provide weak support for R&D spending of 1.29M, which is -0.37x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating earnings of (1.24M) show weak coverage of depreciation charges of 742000, with a -1.67 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 2.26M represents just -4.67x of debt issuance (484000), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 2.73M barely covers operating expenses of (30000) with a -91.03 ratio, suggesting thin operational efficiency margins and limited flexibility.

Peer comparison

Companies in the Semiconductors
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NVDA Nvidia Corp 4,120.22 Bn 6,867.04 847.78 10.48 Bn
2 TSM Taiwan Semiconductor Manufacturing Co Ltd 1,782.57 Bn 362.79 138.75 31.18 Bn
3 AVGO Broadcom Inc. 1,393.11 Bn 119.76 35.84 65.14 Bn
4 MU Micron Technology Inc 453.24 Bn 657.82 30.76 12.43 Bn
5 AMD Advanced Micro Devices Inc 338.42 Bn 78.07 9.77 3.85 Bn
6 TXN Texas Instruments Inc 225.71 Bn 66.70 17.17 14.05 Bn
7 INTC Intel Corp 225.13 Bn -843.17 4.26 46.59 Bn
8 QCOM Qualcomm Inc/De 147.37 Bn 27.47 3.28 14.82 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.89 4.15
EV to Cash from Ops. EV/CFO 4.66 -405.91
EV to Debt EV to Debt 4.81 81.67
EV to EBIT EV/EBIT -10.26 -94.01
EV to EBITDA EV/EBITDA -10.54 112.02
EV to Free Cash Flow [EV/FCF] EV/FCF 5.64 103.01
EV to Market Cap EV to Market Cap 1.02 0.77
EV to Revenue EV/Rev 0.29 36.18
Price to Book Value [P/B] P/B 6.03 24.05
Price to Earnings [P/E] P/E -9.41 97.65
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 2.38
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 3.97
Dividend per Basic Share Div per Share (Qtr) 0.00 0.63
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 21.06
Interest Coverage Int. cover (Qtr) -14.59 8.98
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -124.17 -149.31
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 118.04 70.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.42
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 29.51 51.85
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 44.45 91.14
EBIT Growth (1y) % EBIT 1y % (Qtr) 29.51 36.72
EBT Growth (1y) % EBT 1y % (Qtr) 33.25 30.25
EPS Growth (1y) % EPS 1y % (Qtr) 43.33 49.61
FCF Growth (1y) % FCF 1y % (Qtr) 444.73 281.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 104.96 37.25
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 3.11 0.50
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.09
Cash Ratio Cash Ratio (Qtr) 0.26 2.35
Current Ratio Curr Ratio (Qtr) 0.94 5.61
Debt to Equity Ratio Debt/Equity (Qtr) 1.28 -0.02
Interest Cover Ratio Int Coverage (Qtr) -14.59 8.98
Times Interest Earned Times Interest Earned (Qtr) -14.59 8.98
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -1.10 -113.04
EBIT Margin % EBIT Margin % (Qtr) -2.80 -92.05
EBT Margin % EBT Margin % (Qtr) -2.99 -132.99
Gross Margin % Gross Margin % (Qtr) 4.90 47.72
Net Profit Margin % Net Margin % (Qtr) -3.00 -133.93