SemiLEDs Corp (NASDAQ: LEDS)

Sector: Technology Industry: Semiconductors CIK: 0001333822
Market Cap 15.37 Mn
P/B 5.53
P/E -13.60
P/S 0.36
ROIC (Qtr) -25.19
Div Yield % 0.00
Rev 1y % (Qtr) 898.87
Total Debt (Qtr) 2.85 Mn
Debt/Equity (Qtr) 1.02

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 2.21M provides robust 0.78x coverage of total debt 2.85M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 15.49M provides 5.44x coverage of total debt 2.85M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 2.21M provides exceptional 15.69x coverage of interest expenses 141000, showing strong debt service capability.
  • Operating cash flow of 2.21M provides strong 24.04x coverage of stock compensation 92000, indicating sustainable incentive practices.
  • Robust free cash flow of 1.62M exceeds capital expenditure of 594000 by 2.72x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 2.21M barely covers its investment activities of (595000), with a coverage ratio of -3.72, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (595000) provide weak support for R&D spending of 1.15M, which is -0.52x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating earnings of (989000) show weak coverage of depreciation charges of 717000, with a -1.38 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 1.62M represents just -3.37x of debt issuance (480000), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High financing cash flow of (622000) relative to working capital of (81000), which is 7.68x suggests concerning dependence on external funding for operational needs.

Peer comparison

Companies in the Semiconductors
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NVDA Nvidia Corp 4,521.08 Bn 45.58 24.16 10.48 Bn
2 TSM Taiwan Semiconductor Manufacturing Co Ltd 1,648.98 Bn 31.97 13.84 31.18 Bn
3 AVGO Broadcom Inc. 1,565.97 Bn 67.71 24.51 65.14 Bn
4 MU Micron Technology Inc 366.37 Bn 30.76 8.66 12.43 Bn
5 AMD Advanced Micro Devices Inc 333.34 Bn 100.83 10.41 3.87 Bn
6 INTC Intel Corp 271.33 Bn 1,370.33 5.08 46.55 Bn
7 QCOM Qualcomm Inc/De 199.55 Bn 36.01 4.51 14.81 Bn
8 TXN Texas Instruments Inc 172.17 Bn 34.14 9.97 14.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.02 4.13
EV to Cash from Ops. EV/CFO 7.18 -370.81
EV to Debt EV to Debt 5.58 88.27
EV to EBIT EV/EBIT -16.06 -65.23
EV to EBITDA EV/EBITDA -18.09 22.97
EV to Free Cash Flow [EV/FCF] EV/FCF 9.82 -8.14
EV to Market Cap EV to Market Cap 1.03 0.80
EV to Revenue EV/Rev 0.37 20.31
Price to Book Value [P/B] P/B 5.53 5.16
Price to Earnings [P/E] P/E -13.60 9.20
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 2.39
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 8.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.63
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 9.91
Interest Coverage Int. cover (Qtr) -7.01 8.38
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -488.12 -155.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 55.18 45.60
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.64
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 44.72 26.23
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 62.43 47.12
EBIT Growth (1y) % EBIT 1y % (Qtr) 44.72 25.83
EBT Growth (1y) % EBT 1y % (Qtr) 44.50 39.93
EPS Growth (1y) % EPS 1y % (Qtr) 53.12 24.64
FCF Growth (1y) % FCF 1y % (Qtr) 447.21 244.42
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 130.86 43.10
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 2.76 0.49
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.09
Cash Ratio Cash Ratio (Qtr) 0.23 2.23
Current Ratio Curr Ratio (Qtr) 0.99 5.43
Debt to Equity Ratio Debt/Equity (Qtr) 1.02 0.34
Interest Cover Ratio Int Coverage (Qtr) -7.01 8.38
Times Interest Earned Times Interest Earned (Qtr) -7.01 8.38
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -0.60 -112.38
EBIT Margin % EBIT Margin % (Qtr) -2.30 -91.98
EBT Margin % EBT Margin % (Qtr) -2.63 -132.25
Gross Margin % Gross Margin % (Qtr) 5.70 47.73
Net Profit Margin % Net Margin % (Qtr) -2.60 -133.26